Health financing strategies for achieving Universal Health Coverage in low- and middle-income countries: a narrative review

Abstract

Low- and middle-income countries (LMICs) face persistent health financing challenges, including heavy out-of-pocket payments, fragmented risk pools, and constrained fiscal space that undermine financial protection and equitable access to care. This narrative review synthesizes evidence on health financing strategies in LMICs, examining how revenue generation, risk pooling, and strategic purchasing can advance Universal Health Coverage (UHC). PubMed/MEDLINE, Scopus, and Web of Science were searched for English-language publications from January 2016 to February 2026, supplemented by policy documents from international health organizations. Of 120 records identified, 58 full texts were assessed and 24 sources were included, comprising systematic reviews, country case studies, and policy analyses across sub-Saharan Africa, South Asia, and Southeast Asia. A formal risk-of-bias appraisal was not applied; instead, sources underwent a structured credibility assessment. Tax-based financing and subsidized insurance models appear more consistently associated with coverage expansion and financial protection when supported by adequate public funding, mandatory inclusion, and large risk pools. Social health insurance contributes to equity only where enrollment is mandatory and premiums for the poor and informal workers are subsidized. Community-based insurance plays a complementary rather than cornerstone role, while donor funding and innovative mechanisms offer supplementary support but raise concerns about sustainability and scale. Across settings, fragmented, voluntary, and out-of-pocket-dominated arrangements are repeatedly linked to weaker financial protection. No single financing model is sufficient for UHC. The evidence suggests that integrated, tax-anchored systems with consolidated risk pools, strategic purchasing, and strengthened governance represent the most plausible pathway for LMICs, though financing reform alone cannot guarantee progress, since service readiness, workforce capacity, and governance determine whether financial coverage becomes effective coverage.