Ethiopia’s Health Insurance Scheme Drives Clinic Visits but Faces Service Strains

Ethiopia’s continuing struggle to protect rural households from the financial shock of illness has led policymakers to experiment with grassroots insurance systems that pool risks and prepayment. A new study carried out by the Oromia Health Bureau in collaboration with the Department of Health Economics at the School of Public Health, Addis Ababa University, provides fresh evidence from Bacho Woreda in South West Shoa Zone on how Community-Based Health Insurance (CBHI) has altered healthcare-seeking behavior and perceptions of service quality. The researchers surveyed 386 households between late 2021 and 2022, combining structured questionnaires with focus group discussions, and their findings add nuance to the debate over whether CBHI can be a meaningful path to universal health coverage in low-income settings.

Insurance Opens the Clinic Door

The central discovery of the study is that insured households are far more likely to seek treatment when illness arises than those left outside the scheme. More than four out of five CBHI members who had reported illness in the past six months visited a health facility, while just over half of non-members did the same. Statistical analysis confirmed the strength of this association, showing that CBHI members were more than four times as likely to use outpatient services compared with their uninsured counterparts. This pattern demonstrates that the scheme is fulfilling its core promise: by replacing unpredictable out-of-pocket costs with predictable premiums, it encourages families to seek care even for minor ailments rather than delaying until conditions worsen.

Who Joins, Who Stays Away

Enrollment, however, was not evenly distributed across the population. Age, gender, education, and residence shaped participation in revealing ways. Households headed by older individuals between 51 and 86 years were far more likely to join, while those led by people aged 36 to 50 were 72 percent less likely. Men were 70 percent more likely than women to be enrolled, reversing earlier pilot findings where female-headed households showed stronger participation. Education brought another twist: illiterate or semi-literate households were four to eight times more likely to join than those with a tertiary education. Researchers suggest that highly educated individuals tend to hold formal jobs where CBHI is less relevant, whereas poorer, informal workers in agriculture view the scheme as a safety net. Geography also mattered. Rural households were more inclined to sign up, while urban residents were 56 percent less likely, perhaps because they had greater access to private alternatives.

For those who opted out, barriers included a lack of information; 22 percent of respondents said they did not know enough about CBHI, as well as affordability concerns, with 15 percent calling the premiums too expensive. Others pointed to mistrust of the scheme’s management, limited benefit packages, or dissatisfaction with public health services. Some even believed insured patients faced longer waiting times, discouraging them from enrolling.

Service Quality: Gains and Gaps

While CBHI clearly improved access, the study revealed mixed experiences with service quality. Nearly half of respondents said they were very satisfied with the overall care they received, and a similar proportion noted that quality had improved since facilities were contracted under CBHI. Yet satisfaction dropped when patients judged specific aspects: only 38 percent were very satisfied with drug availability, and stockouts were widespread. Almost all those referred to private pharmacies said it was because essential medicines were missing from public facilities. Diagnostics and cleanliness drew more positive ratings, but waiting times remained a persistent frustration. Nearly half of the respondents reported waiting less than thirty minutes, but many endured longer delays.

Focus group discussions gave these statistics a human voice. Participants described improvements in cleanliness, respect from staff, and functional referral systems. But they also complained of staff shortages, inconsistent motivation, and shortages of medicines. One member explained bluntly: “We burn our time in health facilities to get services, and often we are sent to private pharmacies to buy drugs.” The mix of appreciation and discontent underscores how insurance expansion has exposed deeper structural strains in Ethiopia’s health system.

Lessons for Policymakers

The evidence from Bacho Woreda carries important policy lessons. On one hand, CBHI is proving effective in its core mission of expanding utilization and protecting households from catastrophic health costs. On the other hand, the scheme risks eroding confidence if quality gaps are left unaddressed. The authors recommend scaling up coverage, ensuring better communication so households understand the scheme, and making premiums more affordable for the poorest. They also urge the Oromia Regional Health Bureau and the Ministry of Health to prioritize facility preparedness, secure steady supplies of essential medicines and diagnostics, and invest in professional ethics and training for health workers. Sustainable health financing strategies, they argue, must extend beyond CBHI alone if Ethiopia is to guarantee equitable and quality healthcare for all.

A Broader African Story

The findings from Ethiopia echo experiences across Africa. In Ghana, the National Health Insurance Scheme triggered sharp increases in service use. In Senegal, members of community insurance schemes not only used hospitals more but also paid significantly less out of pocket when they did. Bacho Woreda shows that Ethiopia is on a similar path: CBHI can open the clinic door for the poor and shield them from financial ruin. But the story also carries a warning. Insurance schemes can flood fragile health systems with new demand, and unless drug stocks, diagnostic tools, and staff morale are strengthened, patients’ satisfaction may stall.

The study by the Oromia Health Bureau and Addis Ababa University offers a nuanced picture. CBHI has changed behavior, making families more willing to visit clinics even for minor ailments. It has nudged perceptions of quality upward, though unevenly. Above all, it reminds policymakers that while insurance can be a financial lifeline, it is only as strong as the services it secures. For Ethiopia, the gamble on community-based health insurance is paying dividends, but the challenge now is to ensure that rising demand is met with reliable, dignified, and consistently high-quality care.