Impact of Ethiopia's Community Based Health Insurance on Household Economic Welfare

Anagaw Derseh Mebratie · Robert A. Sparrow · Marleen Dekker · Getnet Alemu · Arjun Singh Bedi

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Abstract

In 2011, in an attempt to increase access to health care and reduce household vulnerability to out-of-pocket health expenditure, the Government of Ethiopia launched a Community-Based Health Insurance Scheme (CBHI). This paper uses three rounds of household survey data, collected before and after the introduction of the CBHI pilot, to assess the impact of the scheme on household consumption, income, indebtedness, and livestock holdings. We find that enrollment leads to a 5 percentage point—or 13%—decline in the probability of borrowing and is associated with an increase in household income. There is no evidence that enrolling in the scheme affects consumption or livestock holdings. Our results show that the scheme reduces reliance on potentially harmful coping responses such as borrowing. This paper adds to the relatively small body of work that rigorously evaluates the impact of CBHI schemes on economic welfare.

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References

2003Household catastrophic health expenditure: a multicountry analysis 1997Insuring Consumption Against Illness 2004Community-based health insurance in low-income countries: a systematic review of the evidence 2008Coping with out-of-pocket health payments: empirical evidence from 15 African countries 2008Coping with health-care costs: implications for the measurement of catastrophic expenditures and poverty.2006The economic consequences of health shocks: Evidence from Vietnam 2011Health shocks and consumption smoothing in rural households: Does microcredit have a role to play?2012Towards Universal Health Coverage: An Evaluation of Rwanda Mutuelles in Its First Eight Years

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