Abstract: Critical illness insurance program that covers both urban and rural citizens is an institutional arrangement to prevent people from“falling into or returning to poverty because of illness”.Starting from spontaneous exploration by local governments, to piloting in a few regions by six ministries and commissions, to the central government’s promotion throughout the country, the critical illness insurance policy has experienced continuous adjustment and improvement. overnment purchase of the insurance service is the result of local governments’years of exploitation and practice and, therefore, under the background of furthering the medical reform and the overall transformation of public management, the introduction of this policy is historically inevtable. The evolution of the policy has gone through three phases: spontaneous exploitation, piloting, and promotion; this paper attempts to evaluate the policy’s effectiveness in each stage in the aspects of fairness, efficiency, and quality. The paper believes that the critical illness insurance should be defined as a supplementary assurance operated by insurance companies through strict governmental monitoring. Together with basic and commercial insurances and charitable assistance, it forms a multilayered protective system for people who suffer from serious illnesses. This will positively optimize the medical protective system and mechanism and push forward the transformation of government administration; it will help enhance the fairness, efficiency, and quality of the medical insurance service.

Key words: critical illness insurance, complementary insurance, government purchase of service, policy evolution, medical system reform