Back ground: Community based  health insurance is emerging as the most preferred form of health financing mechanism in situations where private out-of-pocket expenditures on health are significantly high and cost recovery strategies affect the access to healthcare.  However, in low- and middle-income countries, the majority of health insurance schemes are unable to extend coverage to every segment of the population. The aim of this research project was to assess the community based health insurance coverage, dropout rate, and   factors affecting it in the study area.

Methodology: A Multi-stage community based cross sectional study was conducted in West Shoa Zone from February 1-30/2018. Single population proportion formula was utilized to   calculate sample of 610 study subjects.  The kebeles was selected lottery methods and probabilities proportional to their population size and systematic random sampling techniques was utilized to select the households. The collected data was entered into SPSS version 20 for analysis .Descriptive statistics and vicariate and multiple logistic regression analyses were performed.

P- Values less than 0.05 and 95 % confidence intervals were used to determine associations between dependent and independent variables.

Result: - Out of 610 sample size, 587 participants participated in the survey making the response rate of 96.2 %.  The median age of the respondents was 36 ranging from 18 to 63 years with SD 11.4 years, and 362 (61.7%) were males. About 33.2% of the study participants were ever joined community health insurance and 22.1% were currently health insurance beneficiaries. 317(69.4) were willing to join the proposed community based health insurance in the future. From the current users, 47%, 41.3%   and 11.6% renewed their membership for 1^st, 2^nd and 3rd time respectively. Education status, existence of chronic illness and difficult concern of the households for covering health care cost were significant factors for program coverage

Conclusion and recommendations;-the study showed that household’s coverage were22.1% and dropout were very high to join community based health insurance. So we recommend the  Ethiopian health insurance agency  , FMoH  and  regional and local health insurance  agency  should have to improve the  benefit package and service quality the households can get from the scheme

Key terms: kebele , community based health insurance, coverage