OBJECTIVES: In mainland China, coverage for public health insurance has increased significantly in the past decade. However, limited reimbursement leaves a large funding gap, especially for patients suffering from catastrophic illnesses. In 2012, the ‘Severe Illness Insurance’ scheme was proposed by the central government to cover major illnesses that could impoverish patients. Various models of this new insurance have been implemented in different cities and regions throughout China and have impacted the public reimbursement for severe diseases. This research seeks to understand current models in different regions and to evaluate their implications for healthcare coverage and access to innovative drugs. METHODS:  We conducted extensive secondary research to understand the current models of ‘Severe Illness Insurance’. Further analysis is conducted on different provinces/cities to further evaluate different models of the insurance and their impact on disease-specific coverage, funding mechanisms and access to innovative drugs. RESULTS: Severe Illness Insurance has significantly increased overall reimbursement with some models enable reimbursement outside RDL and present an opportunity for innovative medicines treating severe diseases. With city-level pilot models expanding to provincial levels, this new insurance will continue to positively impact physicians’ treatment decision and patients’ access to drugs and healthcare CONCLUSIONS: The landscape of the healthcare market in China will keep evolving, along with the development of providers, government policies and increasing public coverage. Operating in the emerging Chinese health care market, biopharmaceutical companies should proactively involve themselves in nurturing the budding payer system as capitalizing on the opportunity in China requires long-term planning and collaboration with the evolving system in creative ways.