Abstract: By using the data from CFPS, a differenceindifference model is set up to analyze the effect of unified medical insurance on urbanrural differences through grouping regression. It is found that unified medical insurance can significantly enhance rural residents' health, personal income, life wellbeing and it can also help to reduce their families' Engel's coefficient, while it has caused very limited impact on urban residents. Besides, unified medical insurance increases the income of villagers by substituting agriculture jobs with nonagriculture jobs. Based on the heterogeneity analysis, it is found that the beneficiaries of unified medical insurance mainly include the rural middleaged and elderly people, the groups with chronic diseases and the groups with regular medical treatment in general hospitals, but the income level and life wellbeing of the rural lowincome groups fail to be effectively improved. It is concluded that unified medical insurance is good at narrowing the gap between urban and rural areas, and promoting the coordinated development between urban and rural areas, but the system of medical insurance still needs to be improved to help the lowincome groups so as to reduce inequality within urban and rural areas respectively.

Key words: unified medical insurance; urbanrural difference; residents' health; low income group