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Background  In 1997 there was a major reform of the government run urban health insurance system in China. The principal aims of the reform were to widen coverage of health insurance for the urban employed and contain medical costs. Following this reform there has been a transition from the dual system of the Government Insurance Scheme (GIS) and Labour Insurance Scheme (LIS) to the new Urban Employee Basic Health Insurance Scheme (BHIS).    Methods  This paper uses data from the National Health Services Surveys of 1998 and 2003 to examine the impact of the reform on population coverage. Particular attention is paid to coverage in terms of gender, age, employment status, and income levels. Following a description of the data between the two years, the paper will discuss the relationship between the insurance reform and the growing inequities in population coverage.    Results  An examination of the data reveals a number of key points:  a) The overall coverage of the newly established scheme has decreased from 1998 to 2003.  b) The proportion of the urban population without any type of health insurance arrangement remained almost the same between 1998 and 2003 in spite of the aim of the 1997 reform to increase the population coverage.  c) Higher levels of participation in mainstream insurance schemes (i.e. GIS-LIS and BHIS) were identified among older age groups, males and high income groups. In some cases, the inequities in the system are increasing.  d) There has been an increase in coverage of the urban population by non-mainstream health insurance schemes, including non-commercial and commercial ones.  The paper discusses three important issues in relation to urban insurance coverage: institutional diversity in the forms of insurance, labour force policy and the non-mainstream forms of commercial and non-commercial forms of insurance.    Conclusion  The paper concludes that the huge economic development and expansion has not resulted in a reduced disparity in health insurance coverage, and that limited cross-group subsidy and regional inequality is possible. Unless effective measures are taken, vulnerable groups such as women, low income groups, employees based on short-term contracts and rural-urban migrant workers may well be left out of sharing the social and economic development.

Urban health insurance reform and coverage in China using data from National Health Services Surveys in 1998 and 2003