Market-oriented reforms in the health sector together with fiscal decentralization have ledto low efficiency of resource allocation and utilization, increasing inequality as well asreducing the ability of the poor to access health care services in China. This situationcreates greater health vulnerability for those who are initially at greater risk of disease butnot under the cover of social protection. For the purpose of providing the rural poor withbasic health security, it is necessary to implement targeted programs to offer preventiveservices, to invest in village-level health care services that the poor most frequently need,to strengthen the resources available to the poor and the aged with health relief, and to linkthe community-based health insurance programs with formal insurance services. Market-oriented reforms in the health sector together with fiscal decentralization have ledto low efficiency of resource allocation and utilization, increasing inequality as well as reducing the ability of the poor to access health care services in China. This situationcre greater greater vulnerability for those who are initially for greater purpose of providing the rural poor with basic health security, it is necessary to implement targeted programs to offer preventive services, to invest in village-level health care services that the poor most frequently need, to strengthen the resources available to the poor and the aged with health relief, and to link the community-based health insurance programs with formal insurance services.