Abstract: The new rural cooperative medical insurance, which was implemented in 2003, can theoretically reduce the economic burden of rural residents and improve their health. However, the practical results are in urgent need of empirical testing. This paper conducts an empirical analysis using the Chinese household tracking survey data. The results show that participating in the new rural cooperative medical system significantly improves the physical and mental health of rural residents, and the results are robust. From the analysis of the impact mechanism, after participating in the new rural cooperative medical system, rural residents will significantly increase the number of daily exercise behaviors; under the guidance of the reimbursement ratio hierarchical diagnosis and treatment policy, they will actively choose a lower hospital level for medical treatment; significantly reduce the number of diseases that rural residents encounter out-of-pocket medical expenses; however, there was no significant effect on reducing the proportion of catastrophic medical expenditures.

Key words: new rural cooperative medical insurance;rural resident;health level