The Chinese health system has long privileged those with town and city hukou over villagers. This paper examines urban-rural discrimination in health insurance using data from the Chinese Health and Nutrition Survey (CHNS). The central finding is urban privilege in the health system has declined substantially. Indeed, village hukou bearers now receive healthcare subsidies only slightly lower than those received by town/city hukou holders, and the vast majority of their insurance costs are covered by subsidies—more so than for town/city hukou holders. These results hold true even using relatively conservative definitions. Moreover, health insurance covers a comparable fraction of healthcare costs regardless of hukou. This convergence in insurance provision has occurred alongside a more gradual and less complete convergence in healthcare costs, which remain substantially higher for those with town/city hukou than for those with village hukou.