The Social Insurance System includes three coverages: pension insurance, unemployment insurance and health insurance, in which the health insurance system is the most complicated social security program with the widest coverage, the richest contents and the most complex operating system. Different countries are varied in the insurance system organizing and modeling, but the government intervention is necessary for each system to adjust and make up the market failures. In this paper the authors analyze the theoretical backgrounds and the objectives of the government intervention in health insurance system. Detailed focus is given to the analysis of the confronted problems and policy options are put forward for the existing Chinese health insurance system reforming.