Yemen is a low-middle-income country where more than half of the population live in rural areas and lack access to the most basic health care. At US$40 per capita, Yemen's annual total health expenditure (THE) is among the lowest worldwide. This study analyses the preconditions and options for implementing basic social health protection in Yemen. It reveals a four-tiered healthcare system characterised by high geographic and financial access barriers mainly for the poor. Out-of-pocket payments constitute 55% of THE, and cost-sharing exemption schemes are not well organised. Resource-allocation practices are inequitable because about 30% of THE gets spent on treatment abroad for a small number of patients, mainly from better-off families. Against the background of a lack of social health protection, a series of small-scale and often informal solidarity schemes have developed, and a number of public and private companies have set up health benefit schemes for their employees. Employment-based schemes usually provide reasonable health care at an average annual cost of YR44 000 (US$200) per employee. In contrast, civil servants contribute to a mandatory health-insurance scheme without receiving any additional health benefits in return. A number of options for initiating a pathway towards a universal health-insurance system are discussed.