Why Health Care Still Pushes Poor Families into Poverty in Bosnia and Herzegovina

The WHO’s 2025 review finds that while financial protection in the Federation of Bosnia and Herzegovina has improved since the mid-2000s, catastrophic health spending remains entrenched among the poorest households, with one in four of the poorest still facing severe financial hardship. Outpatient medicines are the dominant driver of this risk, reflecting persistent gaps in insurance coverage, uneven benefits across cantons, and weak protection against out-of-pocket payments.

Produced by the WHO Barcelona Office for Health Systems Financing in collaboration with Freyr Ltd, Damar Plus, the Ministry of Health of the Federation of Bosnia and Herzegovina, and the Health Insurance and Reinsurance Fund of the Federation, a 2025 World Health Organization review provides the most comprehensive assessment so far of whether people in the Federation of Bosnia and Herzegovina can afford health care without falling into financial hardship. Using household budget survey microdata collected by the Agency for Statistics of Bosnia and Herzegovina between 2004 and 2021, and examining coverage policy developments up to 2025, the study situates household experiences within a highly decentralized health system governed by ten autonomous cantons.

Progress that hides persistent inequality

The report shows clear long-term improvement in financial protection. The share of households experiencing catastrophic health spending fell from around 11% in 2007 to 6% in 2021, while the proportion of households impoverished or pushed close to poverty by health spending declined over the same period. In regional terms, the Federation now performs better than several Western Balkan peers, though it still lags behind most European Union countries. However, this aggregate progress masks deep and persistent inequalities. Financial hardship remains heavily concentrated among the poorest households. In 2021, one in four households in the poorest consumption quintile experienced catastrophic health spending, a rate that has barely changed since 2015. More than half of households facing catastrophic costs were already poor or were driven further into poverty, underscoring the regressive nature of out-of-pocket payments.

Medicines at the centre of financial hardship

Outpatient medicines emerge as the single most important driver of financial risk. By 2021, medicines accounted for more than 80% of all out-of-pocket health spending in the Federation and over 90% among the poorest households. Among households experiencing catastrophic health spending, medicines made up nearly four-fifths of total health payments, and as much as 96% in the poorest quintile. This marks a shift from earlier years, when diagnostic tests, outpatient care, dental services, and inpatient treatment played a larger role, particularly for richer households. The COVID-19 pandemic amplified this pattern by reducing access to non-medical services while leaving chronic medicine needs largely unchanged, revealing how gaps in pharmaceutical coverage translate directly into financial distress.

Gaps created by fragmented coverage

These outcomes are closely tied to weaknesses in coverage policy. Although the Constitution guarantees the right to health care, entitlement to mandatory health insurance depends on payroll-based contributions. In a context of high unemployment and a large informal economy, this leaves a significant share of residents uninsured. By 2023, around 14–15% of the population lacked mandatory coverage, with substantial variation across cantons. Service coverage is also uneven. While federal legislation mandates a basic benefits package, not all cantons fully implement it, particularly for outpatient medicines and dental care. Coverage of new and high-cost medicines is limited, dental care is largely confined to basic services, and waiting times for diagnostics and specialist care encourage private spending. User charges further weaken protection, as co-payments apply to most services, exemptions are inconsistently enforced, percentage co-payments for medicines create uncertainty, and no effective federal cap exists to limit cumulative payments.

What the findings mean for reform

The report concludes that improving financial protection will require targeted reforms rather than marginal adjustments. Priority should be given to improving the affordability of outpatient medicines, including better coverage, pricing, and prescribing practices. Closing population coverage gaps by decoupling access to health care from contribution payment, an approach temporarily adopted during the COVID-19 pandemic, would significantly reduce exposure to catastrophic costs. Harmonizing benefits, co-payments, and exemptions across cantons, introducing effective caps on out-of-pocket payments, and strengthening health system data on unmet need and informal payments are also essential. Without such reforms, the Federation’s health system will continue to place its heaviest financial burden on those least able to bear it, despite overall progress toward universal health coverage.