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Medical expenditure has become a heavy burden on the public sector and the family system in many countries. Expanding the coverage and reimbursement of medical insurance has become a common way to reduce the burden. This book will elaborate on how medical insurance may increase the burden instead. It explains why the existing medical insurance system results in increased medical costs, where higher costs may offset the benefits of certainty brought by medical insurance, forming the “paradox of medical care insurance”. This assumption is verified by empirical evidence in China, through a new method developed to find out the actual medical costs, using two parameters: ratio of self-payment of medical insurance and the level of monopoly in the supply of medical services. The book also describes the history, the current situation, and the reform of the health care system in China.