BACKGROUND: China has one of the world's largest health insurance systems, composed of government-run basic health insurance and commercial health insurance. The basic health insurance has undergone system-wide reform in recent years. Meanwhile, there is also significant development in the commercial health insurance sector. A phone call survey was conducted in three major cities in China in July and August, 2011. The goal was to provide an updated description of the effect of health insurance on the population covered. Of special interest were insurance coverage, gross and out-of-pocket medical cost and coping strategies. RESULTS: Records on 5,097 households were collected. Analysis showed that smaller households, higher income, lower expense, presence of at least one inpatient treatment and living in rural areas were significantly associated with a lower overall coverage rate. In the separate analysis of basic and commercial health insurance, similar factors were found to have significant associations. Higher income, presence of chronic disease, presence of inpatient treatment, higher coverage rates and living in urban areas were significantly associated with higher gross medical cost. A similar set of factors were significantly associated with higher out-of-pocket cost. Households with lower income, inpatient treatment, higher commercial insurance coverage, and living in rural areas were significantly more likely to pursue coping strategies other than salary. CONCLUSIONS: The surveyed cities and surrounding rural areas had socioeconomic status far above China's average. However, there was still a need to further improve coverage. Even for households with coverage, there was considerable out-of-pocket medical cost, particularly for households with inpatient treatments and/or chronic diseases. A small percentage of households were unable to self-finance out-of-pocket medical cost. Such observations suggest possible targets for further improving the health insurance system.