ABSTRACT
The key policy for the Chinese governments to support the health insurance development has been to provide high percentage of premium subsidies in the 1 . 1 billion Yuan insured for the two of the basic medical insur-ance systems. According to the current policy, governments should share the responsibility of several hundreds of bil-lions Yuan of subsidies per year. However, because of the indistinct of the responsibility between governments at all levels and the shortage of systematic and long-term duty share mechanism, the current system has been directly affect-ing the fairer and more sustainable health insurance system development. Concerning these issues, this paper primari-ly thought about the contributory principle of subsides after analyzing the present situation and the main problems. Therefore, taking the three factors including disposable income per capita, consumption expenditure per capita and fi-nancial revenue per capita into account, it provides a“5 steps approach” about the contribution of the central govern-ment fiscal subsides using entropy evaluation method, and suggests a proposed program on the governments contribu-tion liability at the provincial or decentralized level based on the “fiscal subsides index”. Thoughts and conclusions drawn from this paper have a significant meaning into the establishment of a fairer and more sustainable financial sup-port mechanism for the basic medical insurance.