Burden or benefit? Unveiling the impact of out-of-pocket health expenditures in Somalia’s healthcare system

Out-of-pocket (OOP) health expenditures impose a heavy burden on Somali households, with profound implications for financial stability and access to care. This research examines the extent and impact of OOP health spending in Somalia, drawing on a survey of 2,000 households and situating Somalia’s experience in regional and global context. Findings indicate that OOP payments account for 44.9% of Somalia’s total health expenditures – far above the global average (18.6%) and the Sub-Saharan Africa average (35.7%). Health insurance coverage is extremely low (only 3.5% of Somalis are insured), leaving most households financially unprotected. As a result, 24% of households incur catastrophic health spending (medical expenses exceeding 10% of income), and a majority resort to harmful coping strategies such as borrowing money, selling assets, or cutting essential consumption to afford healthcare. These OOP burdens are driving many families into poverty and deterring utilization of needed services. International comparison underscores that Somalia’s OOP burden is exceptional, reflecting a fragile health financing system. Drawing on global lessons and the local survey evidence, this paper discusses policy options to reduce OOP expenditures and improve financial protection. Key recommendations include expanding health insurance coverage (through community-based and government-subsidized schemes), implementing social health protection measures (e.g. health vouchers and conditional cash transfers), increasing public investment in healthcare, and strengthening cost regulation. Such reforms are crucial for Somalia to progress toward universal health coverage, protect households from financial hardship, and ensure equitable access to essential health services.