Amid public health sector reforms, China’s health care system is currently at a critical point, encountering unprecedented opportunities as well as challenges as a result of recent rapid economic development. The World Bank report identified acute serious illnesses to be the major risk factor for 30% of Chinese people who live below the official poverty line; other research studies have also indicated that chronic illnesses are major contributing factors for financial impoverishment in China. (World Bank, 1993; J. Chen, Lucas, & Gong, 2004) Unfortunately, the burden of health payment in China has been enormous and, according to the World Health Report 2000, China ranks 188 out of 191 countries in ―fairness of financial contribution‖ in terms of health spending relative to income.
In this paper, we focus on financial protection in rural China, where 745 million–57% of the Chinese people–reside (National Bureau of Statistics of China, 2006). First, we illustrate the degree of financial protection that rural residents have after a series of reforms and changes since 1978. Then we review the current rural health insurance reforms as well as the results from the pilot programs. We conclude with recommendations for future policies and programs.