This paper examines the consequence of the prevalence of disability on eligible rural households’ voluntary enrolment decisions in Ethiopia's community-based health insurance scheme in Ethiopia. It uses data from the Ethiopian Socio-Economic Survey and estimates the multivariate probit model. The results show that disability of any severity in any of the six functional domains affects the decision to join a community-based health insurance scheme. Relatively, households with severe disability are more likely to join the voluntary community-based health insurance scheme. The result confirms the existence of adverse selection in Ethiopia’s community-based health insurance scheme. Adverse selection in the community-based health insurance scheme may threaten its sustainability in the long term. The presence of disability-induced adverse selection in the community-based health insurance scheme may reinforce the revisit of the scheme's design. For the sustainability of community-based health insurance schemes in Ethiopia’s health system, the solution may include making enrolment mandatory for all households, setting the ability to pay based premiums, broadening the risk pooling, and integrating with potential legislated social health insurance scheme.

Disability, Adverse selection, Community-based health Insurance, Ethiopian households