Nowadays, the study of the share of households' health expenditures in their total consumption expenditures and its impact on the well-being of households and society has become an important issue as it is applied in policy and planning by government officials. The objective of this paper is to examine the impact of changes in the share of health expenditures in the basket of total household consumption expenditures and to show that small changes in the variable have significant effects on consumption, desirability, and consequently the well-being of society. This paper examines the role of households’ health care expenditures on the Iranian households’ welfare Using dynamic stochastic general equilibrium framework. The results of this modeling suggest that a decrease in the share of household health expenditures leads to an increase in other household expenditures and, consequently, increases household welfare by increasing utility. The reason for this is that by increasing its health and medical expenditures, the household must reduce its consumption of other goods, which decreases its total utility. It should be noted that this decrease is due to the fact that households are less inclined to spend a larger share of their total consumption expenditure on health services. In general, then, it can be said that an increase in the share of households' health expenditures in their total expenditures leads to a decrease in welfare, and a decrease in this share increases household welfare. However, factors such as the inefficiency of the insurance system, poor monitoring of the health system, and problems in accessing and using health services can have a major impact on households' acceptance, desire, and use of health services and should be considered a serious problem.
JEL classification: E63, F42, H51, N3, p36