Community-based health insurance in rural Ethiopia

Unlock Healthcare Access: How Community-Based Insurance is Changing Rural Ethiopia

Samir D’Costa in Health & Wellness December 2025 • 4 min read.

"Discover how community-based health insurance is revolutionizing healthcare access in rural Ethiopia, offering a path to affordability and improved services."

In many high and middle-income countries, universal healthcare coverage has been achieved through varied financing approaches, including tax-based and social health insurance models. However, in low-income and middle-income nations, progress has been slow, with out-of-pocket healthcare expenditures often leading to impoverishment for vulnerable families.

In Africa, many still rely on direct out-of-pocket payments, which account for a significant portion of total health spending. This results in unaffordable healthcare and low utilization rates. In response, the Ethiopian government introduced community-based health insurance (CBHI) in 2011, targeting rural households and those in the informal sector to increase access to healthcare services.

A recent study examined the role of CBHI in the Tehuledere District of South Wollo Zone, Northeast Ethiopia, focusing on its impact on healthcare access, service utilization, and overall quality. The findings reveal how CBHI is making a tangible difference in one of Ethiopia’s most rural regions.

How CBHI Improves Healthcare Access

Community-based health insurance in rural Ethiopia

The study, utilizing a mixed-methods approach, found that community-based health insurance significantly improves healthcare access by removing the barrier of out-of-pocket payments. This allows more people to seek medical attention when needed, leading to better health outcomes.

Before the introduction of CBHI, healthcare utilization was low. However, the study noted a substantial increase in service utilization, from 0.33 visits per person per year in 2011 to 1.44 visits in 2016. This indicates that CBHI is enabling more people to access the healthcare they need.

Increased Affordability: By eliminating out-of-pocket expenses, CBHI makes healthcare services more affordable for rural households.
Improved Access: More people can seek timely medical attention, leading to better health outcomes.
Higher Utilization Rates: The number of healthcare visits has significantly increased, demonstrating greater access and service uptake.

While CBHI shows great promise, the study also identified limitations. Some quality indicators need improvement, and there are instances of moral hazard, such as the over-utilization of services. Adverse selection, where chronically ill or impoverished individuals are disproportionately enrolled, also poses a challenge. Addressing these issues will be critical to optimizing the effectiveness of CBHI.

Looking Ahead: The Future of CBHI in Ethiopia

Community-based health insurance is not a one-size-fits-all solution, but the study confirms that it can be a powerful tool in improving healthcare access and equity in rural Ethiopia. To fully realize its potential, continued efforts are needed to address the identified limitations, refine the scheme's design, and ensure its long-term sustainability. By making healthcare more affordable and accessible, CBHI is paving the way for a healthier future for Ethiopia’s rural communities.

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This article was crafted using a human-AI hybrid and collaborative approach. AI assisted our team with initial drafting, research insights, identifying key questions, and image generation. Our human editors guided topic selection, defined the angle, structured the content, ensured factual accuracy and relevance, refined the tone, and conducted thorough editing to deliver helpful, high-quality information.See our About page for more information.

This article is based on research published under:

DOI-LINK: 10.4172/2327-4972.1000227, Alternate LINK

Title: Community Based Health Insurance Scheme As A New Healthcare Financing Approach In Rural Ethiopia: Role On Access, Use And Quality Of Healthcare Services, The Case Of Tehuledere District, South Wollo Zone, Northeast Ethiopia

Subject: General Medicine

Journal: Family Medicine & Medical Science Research

Publisher: OMICS Publishing Group

Authors: Molla Yismaw Jembere

Published: 2018-01-01

Everything You Need To Know

What is community-based health insurance (CBHI) and why was it introduced in rural Ethiopia?

Community-based health insurance (CBHI) is a healthcare financing approach designed to improve access to medical services for rural households and those in the informal sector. In Ethiopia, it was introduced in 2011 as a response to the high reliance on out-of-pocket payments, which made healthcare unaffordable for many and resulted in low utilization rates. CBHI aims to remove the financial barriers that prevent people from seeking necessary medical care.

How does community-based health insurance (CBHI) improve healthcare access in rural Ethiopia, specifically in the Tehuledere District?

In the Tehuledere District of South Wollo Zone, Northeast Ethiopia, community-based health insurance (CBHI) improves healthcare access primarily by eliminating out-of-pocket payments at the point of service. This makes healthcare more affordable, encouraging more people to seek medical attention when needed. A study showed a significant increase in service utilization, from 0.33 visits per person per year in 2011 to 1.44 visits in 2016, demonstrating greater access and service uptake due to CBHI.

What are some of the limitations or challenges associated with community-based health insurance (CBHI) that need to be addressed for it to be more effective?

While community-based health insurance (CBHI) shows promise, it faces limitations such as the need for improvement in some quality indicators. There are also instances of moral hazard, where individuals may over-utilize services because they are insured. Additionally, adverse selection, where chronically ill or impoverished individuals are disproportionately enrolled, poses a challenge. Addressing these issues is crucial to optimizing the effectiveness and sustainability of CBHI. Further refinements in the scheme's design and implementation are necessary to overcome these challenges.

How can the Ethiopian government ensure the long-term sustainability of community-based health insurance (CBHI) to continue improving healthcare access for its rural communities?

Ensuring the long-term sustainability of community-based health insurance (CBHI) requires continued efforts to address identified limitations, refine the scheme's design, and secure consistent funding. The Ethiopian government can focus on improving the quality of healthcare services provided under CBHI, implementing measures to prevent moral hazard and adverse selection, and strengthening the overall management and governance of the scheme. Collaboration with local communities, healthcare providers, and other stakeholders is also essential to ensure that CBHI meets the needs of the population and remains a viable solution for improving healthcare access.

Beyond increased affordability and access, what other benefits does community-based health insurance (CBHI) offer to rural communities in Ethiopia, and what are the potential long-term implications?

Community-based health insurance (CBHI) not only increases affordability and access but also fosters a sense of community ownership and participation in healthcare. By pooling resources and sharing risks, CBHI can lead to improved health outcomes, reduced financial strain on vulnerable households, and greater equity in healthcare access. In the long term, successful CBHI schemes can contribute to a healthier and more productive population, driving economic growth and reducing poverty in rural Ethiopia. Furthermore, the lessons learned from CBHI can inform the development of broader healthcare financing strategies and contribute to the achievement of universal health coverage.