Sustaining the community-based health insurance schemes in rural Sidama, Ethiopia

Abstract Introduction Community-based health insurance (CBHI) is a voluntary scheme aimed at protecting informal sector populations from out-of-pocket costs. Ethiopia targets 80% coverage by 2025. However, challenges including low enrollment, adverse selection, and moral hazard challenge its sustainability. This study examines factors affecting CBHI sustainability and strategies for improvement in rural Ethiopia. Methods This study is part of a research to improve NCD detection and care in rural Sidama. It uses data from a cross-sectional survey of adults aged 45+ conducted in May 2024. The study examines adverse selection and moral hazard in CBHI by analyzing member characteristics-age, health status, service use, healthcare spending, and family size. It also assesses willingness to raise premiums and accept co-payments to improve scheme sustainability. Results The study included 2,875 adults, 55.2% of whom were female, 48.6% aged 45-54, and 89.6% had no formal education. About 75% had family sizes >4, 73.6% had 1-3 children under 18, 15.5% had recent healthcare expenses, and 7.3% reported a family member NCD diagnosis. CBHI enrollment was 34.4%, with 82.3% renewing their membership and 88.1% supporting continuation of the scheme. Enrollment was significantly higher among those with elementary education (AOR: 2.1), recent health facility visitors (AOR: 12.9), family members with NCDs (AOR: 2.8), and families with more children. Although 83% viewed the annual premium as high, 56.7% preferred raising it over discontinuing the scheme, and 83.1% supported co-payments to sustain CBHI. Conclusions CBHI enrollment in the study area was low, with disproportionately higher participation among high-risk groups-those with NCDs, large families, and frequent healthcare users-suggesting adverse selection and moral hazard. To enhance sustainability, raising premiums and introducing co-payments could be viable. Expanding membership and attracting lower-risk individuals is also essential. Key messages • Community-based health insurance in rural Ethiopia faces sustainability challenges due to adverse selection and moral hazard, with enrollment disproportionately higher among high-risk groups. • Despite perceiving premiums as high, most participants support raising contributions and introducing co-payments, suggesting strong community willingness to sustain the scheme.