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This study assesses factors that account for inequalities in self-rated health and happiness among Liberal, Socio-democratic and Post-socialist welfare regimes. Past research studies have only examined the factors that influence health and happiness desperately. Drawing on the 2011 International Social Survey Programme and applying ordinal regression techniques, the study examines the reciprocal relationship that exist between health and happiness as it adjusts for health, behavioral life style factors and socio-demographic factors. The results showed a mutual significant relationship between the two variables. Also, health insurance coverage was found to be a significant predictor of both self-reported health status and happiness across all the three welfare regimes. However, health insurance coverage needs to be accompanied by a healthy lifestyle to secure total well-being. Our findings indicate that policies directed towards investment in environmental and social capital, as well as in education and sustainable lifestyle practices are likely to improve both health and happiness of the populations.