Health insurance programs have changed rapidly over time in China. Among rural populations, insurance coverage shifted from nearly universal levels in the 1970s to 7% in 1999; it stands at 94% of counties in 2009. This large increase is the result of a series of health reforms that aim to achieve universal access to healthcare and better risk protection, largely through the rollout of the health insurance programs and the gradual increase in subsidies and benefits over time. ⋯ We discuss some of the problems with the rural and urban residents' schemes including reliance on local government capacity, reimbursement ceilings and rates, and incentives for unnecessary care and waste in the design of the programs. Recommendations include increasing financial support and deepening the benefits packages. Strategies to control cost and improve quality include developing mixed provider payment mechanisms, implementing essential medicines policies and strengthening the quality of primary-care provision.