Introduction: Community-based health insurance is a program that aims to prevent accidental financial hardship for healthcare and improve the quality of healthcare services. Hypertension not only kills but also consumes a lot of health care resources for treatment and threatens the quality of life of the sufferers due to its chronicity of the disease. Objective: This study aims to assess the effect of community-based health insurance on health-related quality of life and associated factors among hypertensive patients in public health facilities of Debre Markos town, northwest Ethiopia, 2021. Methods: Institutional-based comparative cross-sectional study was conducted from March1-April 15/2021 in public health facilities of Debre Markos town. A total of 400 hypertensive patients were recruited from non-communicable disease clinic follow-up by using a systematic random sampling technique. Data was collected through face-to-face interviews using the adopted tools from the World Health Organization health-related quality of life instrument. Data was entered into EPI data version 3.1software and exported to SPSS version 23 for analysis. Linear regression analysis was done to identify factors associated with health related quality of life with P-value 0.05 at 95% CI. Result: The transformed mean scores of health related quality of life among insured and non-insured hypertensive patients were 64.14 and 58.93, respectively. Patients who were grade2 hypertension had increased HRQOL by 6.28 (95% CI=3.49_9.06). Patients without opportunistic disease had increased health related quality of life by 9.87 (95% CI=0.89_18.84). The matched estimator effect of community based health insurance on health related quality of life was increased by 2.18 in insured hypertensive patients. Conclusion: Community based health insurance is an effective program to improve the health related quality of life of hypertensive patients. Age, marital status, educational status, occupation, grade of hypertension, physical activity, medication adherence, and wealth index may be important predictors to improve the health related quality of life of hypertensive patients. The matched estimator effect of community based health insurance on health related quality of life was higher among insured hypertensive patients compared to non-insured patients. Key words: Community based health insurance; Health related quality of life, Hypertension