Background We assessed change in household catastrophic health care expenditures (CHE) and inequality in facing such expenditures in south-west Tehran.

Methods A cluster-sampled survey was conducted in 2003 using the World Health Survey questionnaire. We repeated the survey on the same sample in 2008 (635 and 603 households, respectively). We estimated the proportion of households facing CHE using the ‘household’s capacity to pay’. We identified the determinants of the household CHE using regression analysis and used the concentration index to measure socio-economic inequality and decompose it into its determinants factors.

Results Findings showed that the proportion of household facing CHE had no significant change in this period (12.6% in 2003 vs 11.8% in 2008). The key determinants of CHE for both years were health care utilization and health care insurance status. Socio-economic status was the main contributor to inequality in CHE, while unequal utilization of dentistry and outpatient services had reduced the inequality in CHE between socio-economic groups.

Conclusions We observed no significant change in the CHE proportion despite policy interventions aimed at reducing such expenditures. Any solution to the problem of CHE should include interventions aimed at the determinants of CHE. It is essential to increase the depth of social insurance coverage by expanding the basic benefit package and reducing co-payments.