Abstract: The key to carrying out the “Targeted poverty alleviation” task is to answer the following questions:“who is in poverty”,“what is the cause of poverty”,and “how to help the people in poverty” and other questions.For the first question,the definition of absolute poverty should be transited to the development poverty.For the second question,the concept of economic poverty should be transited to ability poverty.Poverty alleviation should target the cause of poverty,and go beyond the traditional ideas,and then move to the third questions on how to implement strategy for poverty alleviation.The medical insurance system is an important starting point for poverty alleviation,but it also needs empirical support in assessing whether the medical insurance system has reached the goal of “precise poverty alleviation” and “poverty alleviation by health”.This paper analyzes the effect of overall insurance system on the patients.Based on the data from the survey of China Health and Nutrition Survey 1989-2011,the researchers built a logit model on the unbalanced panel data,with the Difference-in-Difference Models (DID),propensity score matching (PSM) and some instrumental variables,and tried to find some specific causes on this poverty.There are three main findings.First,the policy of overall insurance system is good to alleviate poverty caused by illnesses.Second,the effect of medical insurance on poverty is significant.Third,the factors,such as age,education,medical history,disease type,and the severity of disease,have significant effect on this poverty.In the end some suggestions are provided for policy making.Prompting the overall insurance system is very important to the task of poverty alleviation.For certain specific diseases,the proportion of reimbursement of medicine expenses should be increased.Mass education for is the best way to eliminate poverty.The development of commercial health insurance,through mortgage loans and other financial insurance innovation,is quite supportive to the targeted poverty alleviation.

Key words: overall health insurance system coverage, targeted poverty alleviation, difference-in-difference, propensity score matching