Universal coverage of health insurance is the future direction of health system reform in China. At present, the urban employees’ medical insurance scheme covers about 170 million workers, and the new rural cooperative medical system (RCMS) covers about 726 million populations in 2451 counties by the end of 2007. Currently, the yearly premium of RCMS in most rural areas is set around 50 yuan (RMB) per insured, in which two-thirds of the contribution is paid by the central and local government, and is used to reimburse the partial cost of catastrophic illnesses.