Using Income Contingent Loans to Pay for Health Care

Rhema Vaithianathan
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Rhema Vaithianathan: Auckland University of Technology

Chapter 14 in Income Contingent Loans, 2014, pp 165-171 from Palgrave Macmillan

Abstract: Abstract Health care expenditure has traditionally been seen as an ‘investment’ in one’s own human capital. A life course approach to development shows that lack of access to health care in the young can lead to a reduction in schooling and consequently lower wage rates. In high income countries, despite widespread health insurance, some services such as talking therapy for depression are not funded despite depression being a major cause of disability and exit from work. Income contingent loans (ICL) offer an opportunity for those who face potentially high returns to investing in health but are cash constrained from doing so, and where health insurance systems cannot fully overcome the adverse and moral hazard problems. This note suggests areas where ICL could be used to fund health care in both high and low income contexts.

Keywords: Health Care Expenditure; Wage Worker; Moral Hazard Problem; Lifetime Income; Lower Wage Rate (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:pal:intecp:978-1-137-41320-8_15

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DOI: 10.1057/9781137413208_15

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