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How and whether health shocks impact poverty reduction interventions remains a largely unexplored topic to which not much attention has been paid. This study explored whether and how health shocks affect anti-poverty interventions targeted to extremely poor households using data from 8 focus group discussions and 12 case studies. Those in extremely poor households mostly experienced episodes of chronic disease that incurred greater health-care costs, largely financed by the out-of-pocket payment system. The majority of those from poor households met health-care costs by selling their means of livelihood, borrowing cash, and marketing physical assets. This study argues that livelihood support alone is likely to be insufficient to reduce poverty. Health needs, subsequently, should be prioritized while designing an anti-poverty program.