Good health is widely believed to be intimately associated with economic growth and development. A number of governments of developing countries have been combating poverty and boosting development through providing adequate access to health care. However, developing countries have been constrained by the limited governmental revenue. Thus, additional resources should be mobilized through appropriate instruments. Health insurance is a highly practical instrument. However, health insurance in rural areas is problematic and the demand for private health insurance and community-based health insurance scheme is inadequate. Taking China as an example, this study estimates the demand for health insurance and analyzes the health risk management of rural households.