Redistribution of income through the healthcare system is a relevant topic for policy and research on equity. Since annual redistributions ignore lifecycle changes in benefits and contributions, they can suggest income redistributions between socioeconomic groups, which are in fact intra-personal redistributions over the lifecycle. Therefore, it is important to explicitly take lifecycle effects into account. In this paper, lifecycle redistributions between socioeconomic groups in the Dutch healthcare system are investigated and compared to annual redistributions. Lifecycle redistributions are based on a cross sectional approach, in which costs and benefits over all parts of the lifecycle are estimated using the same cross sectional data. The lifecycle net benefits are higher for all socioeconomic groups compared to the annual benefits, especially for women. The lifecycle results show that the income redistributions in the current system rely on the atypical age structure of the population and that the aging of the babyboom generation will make the current system untenable.
(Joint work with Xander Koolman and Henk Don.)