expenditures (also depicted in Figure 3) – we do not observe a lower level of health expenditures for Green Card holders compared to those without.

Similarly, we also estimate the additional protective impact of the Green Card against impoverishing health expenditures to have been relatively modest. Health expenditures can have an impoverishing impact if near-poor households have to switch away from buying other necessary goods in order to cover urgent health costs. A near-poor household that covers health expenditures and therefore has to reduce spending on food would then become a poor household in terms of its living standards (O‘Donnell et al. 2004). In Turkey, national poverty measures are calculated using a consumption basket that _includes_ health spending. With health expenditures included in household nominal expenditures, a household that might be poor without health expenditures may record non-poor levels of expenditures if we include health spending.<sup>7</sup> Table 3 quantifies the impoverishing impact of health spending. We calculate this impact as the percentage of individuals who were poor _without_ taking into account health expenditures (and measured against a poverty line similarly net of health expenditures<sup>8</sup> ) but were non-poor if health expenditures are taken into account. We find that, with 0.8 percent, the impoverishing impact of health spending was modest at the onset of program expansion (2003) due to limited out-of pocked spending even in the absence of the Green Card program. We observe a mild decline in the poverty impact of health spending in Turkey between 2003 and 2008 from 0.8 to 0.3 percent, although the decline is not statistically significant when the confidence interval around the poverty headcount estimates are considered.

Lastly, we examine the incidence of catastrophic health expenditures. These are defined as the share of total expenditures dedicated to health above a certain threshold level (Xu et al.

> 7  We apply the following calculation to assess the impoverishing impact of health spending: Given published poverty rates by TURKSTAT at the national level, we derive poverty lines endogenously for each HBS year, using nominal expenditures (as the publically available household surveys do not include geographic identifiers which would have allowed for a computation of regional poverty lines and the derivation of real consumption expenditures). Those households above the poverty line are marked as non-poor (including health expenditures). We then create a new poverty line that does not include health expenditures and assess the poverty status of each household not including health expenditures.  The impoverishing impact of health spending is the percentage of individuals who were poor without health expenditures (when compared to the poverty line net of health expenditures) but were non-poor when full expenditures are compared to the full poverty line (including health expenditures).

> 8 The poverty line is adjusted by subtracting the average health expenditures of the poorest three deciles from the poverty line. The poverty line shifts from the 27<sup>th</sup> percentile in 2003 to the 17<sup>th</sup> percentile in 2008, hence we pick the bottom 3 deciles as an approximation for the deciles around the poverty line across this time period.

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