Abstract
According to a recent WHO report, around 100 million people are reduced to poverty every year due to costs associated with illness. Contributing to the growing literature on the economic burden of illness, this article examines the indirect and direct costs of illness that occur at the household level, describes their influence on treatment-seeking behaviour and assesses their impact on household welfare. The results presented are based on an empirical study carried out in slum settlements in the megacity of Chennai in South India. We show that the poorer section of slum dwellers suffer disproportionally from catastrophic illness costs despite the existence of free public health services. Policies need to be implemented that enhances the resilience of poor households against illness costs.