This study is based on a cross-sectional household survey conducted in 2023–2024 by the Ministry of Health’s Health Economics and Financing Office. (MOH-HEFO). The survey covered 2,000 households across Somalia, encompassing both urban and rural areas in multiple regions. A multi-stage cluster sampling approach was used to ensure broad representativeness of the population. Enumeration areas were selected from major districts (including both relatively secure urban centers and accessible rural communities) to capture diverse geographic zones. Within each cluster, households were randomly selected and interviewed. The sample was designed to approximate national representativeness, though some extremely insecure areas had to be excluded; nonetheless, the surveyed households provide a wide coverage of Somalia’s demographic and socioeconomic spectrum. Data collection took place between late 2023 and early 2024. Survey respondents were typically the household head or another adult knowledgeable about the household’s finances and health-seeking behavior.

This research synthesizes findings from a 2023–2024 survey of 2,000 households across Somalia (Fig. 1).

Fig. 1

Map of Survey clusters by urban/rural classification. MOH-HEFO: Map of household survey conducted 2023–2024

The household survey gathered detailed information on demographics, income sources, health service utilization, health-related expenditures, and coping mechanisms for healthcare costs. Respondents reported their out-of-pocket spending on healthcare over the previous 12 months, including expenses on consultations, hospital visits, medications, diagnostics, and transportation for medical purposes. The survey also inquired about whether households delayed or forwent care due to costs, and what strategies (if any) they used to cope with large medical bills. Health insurance coverage (if any) was recorded for each household member. We defined catastrophic health expenditure as a household’s OOP health spending exceeding 10% of its annual income, consistent with standard definitions in the literature [10]. This threshold (10% of income) is widely used to indicate when medical costs become financially ruinous for a household (Xu et al. 2007). We also recorded instances of households exceeding a 25% income threshold for sensitivity, though our primary analysis focuses on the 10% benchmark.

Survey data were analyzed using descriptive statistics to determine the incidence and distribution of OOP expenditures and financial outcomes. We calculated the share of households with catastrophic health spending, the proportion of households reporting various coping strategies, and average OOP spending disaggregated by household size and income level. Results from Somalia’s survey are presented alongside relevant secondary data from global sources to provide context. In particular, we drew on the World Health Organization’s Global Health Expenditure Database (GHED) and World Bank indicators for comparative figures on health financing (e.g., OOP share of total health expenditure, insurance coverage rates in other countries, and regional averages). These external datasets (most recent values as of 2022) allow us to benchmark Somalia’s indicators against Sub-Saharan African and global norms. Although this was not a formal systematic literature review, we also incorporated pertinent findings from recent research on health financing in low-income and fragile settings to inform our discussion and policy recommendations. All quantitative findings from the household survey are reported with appropriate tables and figures, and we integrated the survey results with literature insights in the discussion section.

The survey captured a broad range of household characteristics. Table 1 summarizes the demographic profile of the 2,000 respondents, including gender, age, and household size distributions. Notably, the majority of respondents were male (62.5%), reflecting either the composition of household heads or availability of respondents, while 37.5% were female. The age distribution shows a youthful population: 40% of individuals in the surveyed households were aged 18–35 years, with an additional 20% under 18 years, 30% between 36 and 55 years, and only 10% aged 56 or above. Household sizes were often large – over 40% of sampled households had 7 or more members, and another 21% had 5–6 members (Table 1). Only 13% of households were nuclear units with 1–2 members. This prevalence of large households has implications for healthcare needs and expenses, as more members increase the likelihood of someone falling ill at any given time.

Table 1

Demographic profile of respondents (N = 2,000 households)

The demographic profile reveals a predominantly young population and large family units. Such household structures can significantly impact OOP health expenditures: larger families often face cumulative healthcare costs, as multiple members may require care, and they may be caring for many children who contribute less to income. The finding that 42% of surveyed households have 7 or more members underscores the potential financial vulnerability – big families must spread their income across many needs, so a health shock to even one member can strain the entire household’s budget.

The analysis of health insurance coverage among respondents reveals extremely low levels of insurance penetration, which directly contributes to the heavy reliance on OOP payments for healthcare. Table 2 shows that only 3.5% of the surveyed individuals reported having any form of health insurance, whereas a staggering 96.5% had no insurance at all. In absolute terms, out of 2,000 households (with 12,000 individuals in total), only about 70 people were covered by any insurance, while approximately 1,930 people were uninsured.

Table 2

Health insurance coverage among respondents

This stark disparity highlights the near-absence of formal financial protection mechanisms in Somalia’s health sector. The overwhelming majority of Somalis must pay for health services out-of-pocket at the point of use, since neither government nor private insurance schemes cover them. In our survey, many of the few insured individuals were those employed by institutions (e.g. government or large companies) or enrolled in small community or NGO-supported schemes. However, such cases are rare. For the average Somali household, there is effectively no risk-pooling: when someone falls ill, the family is expected to shoulder the expenses directly. This situation leaves households highly vulnerable, as even minor illnesses can require payments that disrupt their finances. The lack of insurance coverage is a critical factor underlying Somalia’s high OOP spending share and will be a major challenge to address in moving toward UHC.

The survey findings indicate that OOP health expenditures are a substantial financial burden for Somali households, with significant variation across different demographic groups. In absolute terms, the mean annual OOP health spending per household in the sample was approximately USD 140 (median around USD 100), which is very high relative to incomes in this low-income setting. Table 3 disaggregates the average OOP expenditure by household size and by household income level (categorized into terciles for low, middle, high income). The data show clear inequities and patterns:Table 3

Average OOP expenditures by household size and income level

Larger households tend to spend more in absolute terms on healthcare: households with 7 + members reported an average of $250 in annual OOP health spending, compared to about $50 for the smallest households with 1–2 members. Medium-size households (3–4 members) spent $120 on average, and those with 5–6 members spent $180. Bigger families thus face higher total costs, likely because with more individuals the probability of someone needing care is greater, and chronic illnesses in even one member can strain a large family.

Households with 7 or more members spend significantly more on OOP health costs compared to smaller households, reflecting the cumulative burden of illness in larger families. Additionally, lower-income households tend to spend a larger proportion of their income on healthcare – indeed, some of the poorest families are spending 10–20% of their annual income on medical needs, which exacerbates financial vulnerability and can quickly lead to catastrophic health expenditures.1

Nationally, our results confirm that out-of-pocket payments are the prevalent mode of health financing in Somalia and impose substantial financial strains. An overwhelming 96.5% of Somali households have no health insurance (only about 3.5% are covered by any form of insurance), meaning virtually all medical costs must be paid at the time of care [8, 11]. This lack of risk pooling translates into a very high OOP cost share in the health system. Using data from the World Health Organization and MOH for the year 2019–2022, we estimate that about 44.9% of total health expenditures in Somalia are financed through out-of-pocket payments by individuals and families [8]. This is extraordinarily high by international standards, indicating that nearly half of all spending on health comes directly from household budgets. By comparison, the global average OOP share is only around 18%, and even the average for Sub-Saharan Africa (35%) is significantly lower [12]. Somalia’s heavy reliance on OOP financing thus stands out as an extreme case, reflecting the absence of widespread public or private insurance and the very limited scale of government or donor-funded health services relative to the population’s needs.

The consequences of this high OOP burden are evident in the survey findings on household financial distress. Over half of Somali households reported experiencing financial hardship due to medical expenses in the past year. Specifically, 24% of households were found to have catastrophic health expenditures (by our definition of OOP spending >10% of annual income). In other words, roughly one in four Somali families had to devote more than a tenth of their yearly income to healthcare payments – a level that can be ruinous for their finances. This catastrophic spending incidence of 24% in Somalia is more than double the estimated global incidence (11–12% of households) and well above the regional average (16.5% in Africa) [10, 13]. It even exceeds rates observed in many other low-income African countries – for example, a study in Nigeria found about 16% of households incurred catastrophic health costs at the 10% income threshold (Aregbeshola and Khan 2018). Our finding underscores how uniquely vulnerable Somali households are to health-related shocks.

To visualize Somalia’s situation in context, Figs. 2 and 3 illustrates the incidence of catastrophic health spending (using the ≥ 10% of income definition) in Somalia compared to regional and global benchmarks. Somalia’s 24% catastrophic incidence far surpasses the global rate (11.7%) and the African regional rate (16.5%). This gap highlights Somalia as an outlier in financial protection outcomes [14, 15].

Fig. 2

Incidence of Catastrophic Health Spending (≥ 10% of household income). Somalia’s rate (24% of households) is significantly higher than the Sub-Saharan Africa average (16.5%) and more than double the global average (11.7%) [10]. (Sources: Xu et al. 2007; WHO 2019; MOH-HEFO household survey 2023–2024.)

Households employ various coping strategies to manage out-of-pocket payments, many of which have long-term adverse impacts on their economic well-being. Our survey inquired about how families handled large medical bills or unaffordable health expenses. The responses, summarized in Table 4, paint a concerning picture: fully half of the surveyed households (50%) said they borrowed money – whether from friends, relatives, or local moneylenders – to pay for healthcare at least once in the past year. Borrowing was both informal (from social networks) and, in some cases, formal (taking loans from microfinance or other institutions when available). Meanwhile, 30% of households reported selling assets to cover medical costs. These assets ranged from livestock (for rural pastoralist families) to land, jewelry, or other property. Distress sale of assets can undermine a household’s long-term income generation (for example, selling a productive asset like a cow or a piece of land can reduce future earnings). Finally, about 20% of families said they reduced spending on other essential needs – such as cutting down on food consumption, pulling children out of school to save on fees, or not paying rent or utility bills – in order to afford healthcare. Many families likely used a combination of these strategies at different times.

Table 4

Household coping mechanisms for out-of-pocket medical bills (Multiple responses allowed; N = 2,000 households)

These coping mechanisms underscore the significant financial stress caused by OOP health expenditures. Each of these strategies carries negative consequences: taking on debt can lead to a debt trap, selling assets can reduce future livelihood opportunities, and cutting back on essentials directly harms welfare. For instance, selling productive assets (like a farming tool or livestock) or pulling children out of school due to medical costs can undermine a family’s long-term economic prospects. Reducing consumption of food or other basics to pay medical fees can worsen nutrition and health outcomes, creating a vicious cycle where poor health leads to impoverishment, which in turn leads to worse health. Our findings mirror patterns observed in other low-income countries with high OOP burdens [17, 18].

High out-of-pocket costs also influence health-seeking behavior in Somalia. When people must pay for services at the point of use, they often delay or forgo care due to the expense. Qualitative evidence and global studies suggest that in settings like Somalia, families may postpone treatment of common illnesses, skip recommended tests or medications, or avoid going to the hospital because they cannot immediately afford the fees [18]. Our survey results are consistent with this: many households reported hesitating to seek care for financial reasons. Several respondents admitted that they waited to see if an illness would “resolve on its own” or tried cheaper traditional remedies first, only seeking formal care when the condition became severe – by which time treatment was often more complicated and costly. In some cases, these delays led to more serious health crises later, as minor ailments evolved into emergencies. For example, untreated infections sometimes progressed and required hospitalization, whereas earlier care might have been simpler and cheaper. Thus, the high OOP burden not only causes financial strain but also hinders access to timely healthcare, undermining the very purpose of the health system. This phenomenon – where cost is a barrier to care – contributes to Somalia’s poor health indicators, as people do not get treatment when needed.

Despite these challenges, it is notable that a significant proportion of Somali respondents still reported positive experiences with healthcare services when they were able to obtain care. In the household survey, about 44% of participants described their interactions with health providers or the outcomes of treatment as generally positive (rating their last healthcare experience as good). This suggests that the quality or effectiveness of care received is not necessarily the primary concern – rather, it is the affordability of care that remains the major barrier. In other words, when Somalis can access health services, they often are satisfied with the care; the key issue is being able to access (pay for) that care in the first place. The implication is that if financial access can be improved (for example, through insurance coverage or subsidies), there is likely a strong latent demand and willingness to utilize healthcare, and the population could achieve much better health outcomes. Our findings thus underscore that Somalia’s health burden is not simply a matter of insufficient services, but critically a matter of financial access to those services.

In summary, out-of-pocket health expenditures in Somalia are placing substantial strain on household finances and decision-making. The absence of widespread insurance and safety nets means families face high costs that often exceed their ability to pay, leading to catastrophic spending and harmful coping strategies. Many Somalis are caught in a precarious situation where seeking healthcare can itself cause economic hardship, yet avoiding care can lead to worse health (and even higher expenses later). These dynamics reinforce inequality – those with lower incomes or weaker support networks suffer the most – and pose a major obstacle to improving health outcomes nationally. The results point to an urgent need for interventions that provide financial risk protection to households and reduce direct payments at the point of service.

Given the findings and lessons discussed, it is clear that Somalia must enact comprehensive health financing reforms to alleviate the burden of out-of-pocket expenditures on its population. The overarching goal should be to move toward a system where no one faces financial hardship to obtain healthcare, in line with UHC principles. Below, we outline key policy recommendations for Somalia – prioritized and tailored to the local context – informed by both the survey evidence and international best practices. Some of these actions can yield benefits in the short term, while others will require sustained effort over the medium to long term:

Expand Health Insurance Coverage: Developing risk-pooling mechanisms is paramount to reducing OOP payments. Somalia should explore introducing community-based health insurance (CBHI) schemes as an initial step, especially targeted at rural communities and the informal sector where traditional insurance is hard to implement. Rwanda’s experience with Mutuelles de Santé (community insurance) demonstrates that high enrollment can be achieved even in low-income settings [34, 35]. In parallel, the government – with donor support – can pilot a modest national health insurance program or a social health insurance (SHI) fund for formal sector workers (e.g., government employees, formal private sector). Over time, these schemes can be scaled up and integrated into a broader system. Critical to success will be subsidizing premiums or covering contributions for the poorest households so that everyone can enroll [36, 37]. Initial benefit packages might be basic (covering primary care, maternity, and major illnesses) but can still greatly reduce OOP for common services. Given Somalia’s predominantly informal economy, innovative enrollment strategies will be needed – for instance, leveraging local clan structures or cooperatives to organize CBHI groups, and allowing flexible payment schedules. Building trust in insurance is also crucial (Ozawa & Walker 2021); community engagement and demonstrating early benefits will help convince people to join.

Implementing these policy recommendations in Somalia will undoubtedly require overcoming significant challenges. The political and security context is difficult; government capacity is limited; and the health sector is fragmented with many non-state actors. However, the status quo – where out-of-pocket payments impoverish families and limit access to care – is not sustainable if Somalia is to improve health outcomes and achieve its development goals. The experience of other post-conflict countries suggests that even incremental steps can make a difference. For instance, a donor-supported pilot of CBHI in one region or district could provide a model that, if successful, gains buy-in for expansion. Similarly, negotiating a one-time bulk purchase of essential drugs could demonstrate how costs to patients can be immediately lowered (e.g., by distributing those medicines for free at public facilities). Close coordination with international partners will be essential; Somalia can leverage global initiatives for UHC in fragile states to garner technical and financial support for its reforms [40]. Development partners (UN agencies, World Bank, bilateral donors) should be encouraged to align their funding with Somalia’s strategy to reduce OOP – for example, supporting the health voucher scheme or subsidizing insurance premiums for a period of years until the government can assume that cost (Ooms & Hammonds 2019 argue that donor assistance should increasingly focus on financing UHC for the poor). Additionally, the role of the private sector must be accounted for – engaging private providers in regulation and in any insurance schemes will be key, since they are the primary caregivers. The government might consider public-private partnerships, such as contracting private clinics to deliver basic services for a fixed fee reimbursed by the state/insurer, thereby removing the charge from patients.

In terms of prioritization and sequencing, a phased approach is advisable. In the short term (next 1–2 years), Somalia and its partners can implement quick-win interventions: remove user fees for priority services where possible (perhaps using donor funds to compensate providers), launch health vouchers for maternal and child health, and negotiate lower medicine prices for the public sector. Simultaneously, design work and stakeholder consultations for insurance pilots (CBHI or SHI) should begin. In the medium term (3–5 years), roll out community-based insurance in select regions and a national insurance scheme for formal workers, increase government health funding as the fiscal situation allows (even modestly), and put in place regulatory measures for cost control. Monitor and adjust these pilots. In the long term (5 + years), aim to integrate successful pilots into a nationwide health financing system – e.g., merge community schemes into a national pool, expand coverage to more services, and institutionalize health financing policies through legislation (such as a National Health Insurance Act). By setting clear milestones for each stage and maintaining flexibility to adapt, Somalia can build momentum. The road will be challenging, but as other countries have shown, determined leadership can surmount even significant barriers over time.

In summary, Somalia’s policymakers – together with development partners and civil society – should focus on building a pro-poor health financing system that gradually replaces direct out-of-pocket payments with prepayment and risk-sharing arrangements. The strategies of expanding insurance coverage, instituting social safety nets for health, boosting public financing, and regulating healthcare costs are all complementary pieces of this puzzle. Over time, these measures will not only reduce the financial burden on households but also likely increase health service utilization (as cost barriers fall) and improve population health indicators. Reducing OOP expenditures is thus an investment in both the economic resilience of Somali families and the overall effectiveness of the health system.