The effect of community-based health insurance on healthcare utilization and out-of-pocket health expenditure in the Tigray Regional State, Ethiopia.

Community-based health insurance (CBHI) is increasingly recognized as an effective mechanism for protecting low-income populations from health-related financial shocks and advancing universal health coverage (UHC) in developing countries. This study evaluates the effect of CBHI on healthcare utilization and out-of-pocket (OOP) health expenditures in the Tigray region of Ethiopia. To evaluate this effect, a cross-sectional survey was conducted in 2020 among 800 households (400 CBHI members and 400 non-members) selected through multistage random sampling. In the first stage, three woredas were purposively chosen, followed by stratified simple random sampling to select households. Data were analyzed using logistic regression and propensity score matching (PSM) in Stata version 17. The findings showed that CBHI membership was significantly associated with increased healthcare utilization and reduced OOP expenditure. Insured households reported 3.36 more outpatient visits (95% CI: 2.15–4.57) and 0.66 more inpatient visits (95% CI: 0.23–1.09) annually compared to non-members, who averaged 3.03 outpatient visits and 0.82 inpatient admissions. Admissions to public health institutions increased by 0.69 (95% CI: 0.35–1.03), while usage of private healthcare facilities showed no significant change. Annual OOP spending was 1,080.87 birr lower among members (95% CI: − 1,624.08 to − 537.66), with outpatient costs reduced by 867.39 birr (95% CI: − 1,223.95 to − 510.84). Additionally, CBHI membership was associated with a reduction of 0.08 in the incidence of catastrophic health expenditure (CHE) (95% CI: − 0.14 to − 0.23). In conclusion, CBHI significantly improves access to public healthcare and alleviates the financial burden by lowering OOP spending and reducing CHE. However, its limited effect on inpatient OOP costs and private healthcare utilization underscores the need for expanded benefit packages and better integration across healthcare providers.