Based on the 2021-2023 China Residents’ Psychological and Behavioral Survey data, this study uses the concentration index to analyze the trends in health-related quality of life inequality and deconstructs the underlying causes of health inequality among Chinese residents. The findings are as follows: (1) Between 2021 and 2023, health inequality in China first narrowed and then widened. Poorer health is concentrated among low-income groups, particularly in the western and rural areas; (2) Personal health status has the greatest impact on health inequality, followed by economic and family characteristics, while social characteristics contribute the least to health inequality; (3) Income, employment status, chronic disease prevalence, BMI, family health, and social support are the main factors affecting health inequality, with their differences further exacerbating health disparities. In contrast, education level and commercial health insurance contribute negatively to health inequality and are crucial in narrowing health disparities. This paper suggests that the government should optimize resource allocation and policy design to reduce socioeconomic gaps, strengthen chronic disease management and support vulnerable groups, improve multi-level and multi-channel education and promotion mechanisms to enhance public health literacy, strengthen inter-departmental collaboration and resource integration, focus on social support and family health, and break down regional disparities to promote coordinated development.