BackgroundCommunity based health insurance (CBHI) is characterized by voluntary involvement, pooling of health risks and of funds occur within a community. It is becoming increasingly popular way to increase the use of healthcare services in low- and middle-income nations. Understanding the effect of CBHI on the level of health services utilization is a paramount for evidence based decision making. Hence, this study aimed to estimate the pooled effect of CBHI on health services utilization in Ethiopia.MethodsStudies were searched from PubMed, Google scholar, Web of Science, Research4life, Science Direct, African Journal Online and national websites for grey literatures. We were adhered to the PRISMA guidelines. Cross sectional and quasi experimental studies were included. Studies were screened, and critically appraised for quality using Joanna Briggs Institute Critical Appraisal tools. The data were extracted using Microsoft excel and exported to STATA 17 and RevMan 5.4.1 for further analysis. Heterogeneity between studies was assessed using Cochran’s Q statistic and quantified with I2. A random-effects model was used to estimate the pooled effect size. Subgroup analysis was done to show variations of the effect sizes across study years.ResultA total of 1501 studies were identified, out of which only 14 of them were included in the final meta-analysis. Health services utilization among CBHI members and non-members was 69.1% [95%CI (57.1–81.1%)] versus 50.9% [95%CI (40.6–61.3%)] respectively (difference in the effect was 18.2%). The CBHI members were nearly three folds more likely to utilize health services as compared with their counterparts [OR = 2.54, 95%CI: (1.81, 3.57). On average, CBHI users had 1.14 increased health facility visits as compared to non-insured, mean difference (MD) = 1.14 visits with 95% CI (0.65–1.63).ConclusionThe CBHI has a significantly increased health service utilization in Ethiopia. Hence, it will have a great contribution to meet the health for all agenda in resource limited countries.