Over recent years,consumption in China is unusually low and has continued to decline as share of GDP,it becomes one of the restrictive factors of economical development.The high precautionary savings and lack of consumption capability may be due largely to inadequate public health insurance coverage.In this paper,we utilize both statistical and qualitative analysis methods to examine the effect of public health insurance coverage on households consumption,based on economic principles relevant to insurance and consumption.Since there is obvious difference between urban and rural areas in China both in the development of economy and public health insurance system,so we set econometric models for urban and rural areas respectively in our empirical analysis.With the panel data of 31 provinces in China,we indhat Urban Employees Basic Medical Insurance Program has signi icant positive effects on the consumption of urban residents,while the New Rural Cooperative Medical Insurance Program has no such effect on rural residents consumption.