With the dissolution of collective farming in the early 1980s, however, the central government adopted a laissez-faire policy toward the governance of rural communities, and the rural health care system was progressively abandoned. By 1993, only about 10% of China’s rural population had health insurance, and farmers who became sick either spent down family savings to purchase health care or forwent medical services altogether. Indeed, health care expenses caused 2.5% of households to fall below the poverty line in 1995 (Gustafsson and Li, 2003), and 22% of poor households attributed their poverty to illness or injury in 1998 (Ministry of Health, 1999).