The authors analyse the effect of insurance on the probability of an individual incurring 'high' annual health expenses using data from three household surveys. All come from China, a country where providers are paid fee-for-service according to a schedule that encourages the overprovision of high-tech care and who are only lightly regulated. The authors define annual spending as 'high' if it exceeds a threshold of local average income and as 'catastrophic' if it exceeds a threshold of the household's own per capita income. The authors estimates allow for different thresholds and for the possible endogeneity of health insurance (instrumental variables and fixed effects are used). The main results suggest that in all three surveys health insurance increases the risk of high and catastrophic spending. Further analysis suggests that this is due to insurance encouraging people to seek care when sick and to seek care from higher-level providers.