Abstract: Based on the data of China Family Panel Studies in 2018 (CFPS 2018), this paper empirically evaluates the poverty reduction effect of rural medical insurance system and its heterogeneity by using binary Logistic model with relative poverty line as a poverty standard. The results of total sample analysis show that rural medical insurance has a significant effect on poverty reduction, reducing the incidence of poverty by 43.0% under the relative poverty line. The results of heterogeneity analysis show that there are differences in the poverty reduction effect of rural medical insurance in terms of age and gender. As for age, the poverty reduction effect is more significant for the middle-aged and elderly people. With regard to gender, the poverty reduction effect on women is generally higher than that on men. In order to give full play to the effectiveness of rural residents’ medical insurance in poverty reduction, we should optimize the internal system design of medical insurance to strengthen its economic performance, and sink more high-quality health care resources toward the rural areas to enhance health performance. In addition, we should establish a long-term mechanism to improve the accuracy of medical insurance for poverty reduction.