The Chapter describes the status of health financing in low- and middle-income countries (L&MICs) and their health financing transition over the past two decades. Advancing Universal Health Coverage (UHC) requires an expansion of coverage over three dimensions: (i) health care benefits, (ii) population coverage, and (iii) cost coverage using prepaid/pooled funds. As national incomes rise, countries undergo a health financing transition, increasing total levels of health expenditure while increasing the publicly financed share of health spending and reducing the external- and OOP-financed share of spending. Two pro-poor paths are common for the expansion of health coverage. Many countries implement health insurance schemes for the poor. Others expand platforms of public providers that are mostly used by the poor, often focusing on community and primary care services. Countries choosing the pro-poor health insurance path develop targeting and enrolment instruments. Targeting tends to be stricter with social security purchasers, compared with ministerial purchasers. Fragmented systems, while suboptimal, can sometimes be more pro-poor than integrated systems.