Financial protection

Financial protection is at the core of universal health coverage (UHC) and is one of the final coverage goals of health financing policies. It aims to eliminate financial barriers to accessing needed care and protect people from health-care payments that compromise their ability to meet basic needs or substantially reduce their capacity to afford other goods and services.

Globally, the share of the global population experiencing financial hardship due to out-of-pocket health spending, defined as exceeding 40% of a household discretionary budget, fell from 34% in 2000 to 26% in 2022. Despite this progress an estimated 2.1 billion people still faced financial hardship in 2022. Of these, 1.6 billion were pushed or further impoverished by direct health-care costs. Financial hardship remains highly unequal: among the poorest, three out of four face financial hardship due to healthcare costs – compared with one in 25 among the wealthiest in 2022.

Protecting people from financial hardship requires reducing reliance on out-of-pocket payments at the time of care and strengthening prepayment and pooling mechanisms, such as government financing.

Learn more about global trends, country performance, and policy options in our reports, and explore the latest financial protection data through our data portal. Read the reports, Explore the data and Understand the changes in SDG 3.8.2 indicator.

In-depth, context-specific analysis and evaluations of health financing policies are needed to understand the drivers of trends.

Financial protection is undermined by heavy reliance on out-of-pocket (OOP) health spending in all countries at all income levels. OOP health spending undermines efforts to eradicate poverty, which can be avoided by minimizing OOP health spending for people living close to poverty, and eliminating such payments for people living in poverty.

Financial protection is not guaranteed by participation in a health coverage scheme. There are different ways of financing health systems to ensure a population is financially protected, however, evidence shows that more significant prepaid, pooled, compulsory payments are needed.

Public health funding must increase further and be used more efficiently and equitably.  Different revenue sources must be pooled or their utilization better coordinated.  The size of compulsory prepaid funds must be sufficiently large; prepaid funds must be redistributed; and coverage for medicines must be extended.

OOP spending on health must be limited to low, fixed, and capped co-payments, and removed completely for the poor and most vulnerable. Removing financial barriers to care reduces forgone care, thereby improving service coverage and financial protection.