Background: Inequalities in health and health care have drawn considerable attention in social determinants of health literature. This study aims to calculate the inequality of out-of-pocket health payments (OPHP) for Iranian households during the period 1984 to 2019 and provide decomposed inequality for households with different socioeconomic status. Methods: This longitudinal study utilized the Iranian Statistics Centre data on Iranian household income and expenditures survey. The analysis includes a total of 995,300 households during a 36-year period from 1984 to 2019. The Theil index and the mean logarithmic deviation were used to decompose inequality into within-group and between-group for OPHP among Iranian households. Results: The findings indicate that the mean of the Theil index for the households covered by insurance is 1.44 (SD ± 0.34), while the index was 1.35 (SD ± 0.31) for households without insurance coverage. The mean of the Theil index for rural and urban households was 1.29 (SD ± 0.29) and 1.43 (SD ± 0.33), respectively. Regardless of the fluctuations, the trends of between- group and within group inequalities in OPHP were almost similar until 2011, but they followed a different path since then. Conclusion: Households living in cities, households with insurance coverage, and households in high income levels have experienced more inequality in OPHP than other households. This study provides a novel interpretation of inequality in health care expenditures and provides a long-term time series data to assess the effectiveness of implemented policies in health care system.