This study investigates the willingness to pay (WTP) for basic health insurance (BHI) among informal sector workers in Wuhan, China, using a contingent valuation method. The study found that informal sector workers were willing to pay an average of 30 RMB (95% CI 27-33) for BHI and 4.6% of their income (95% CI 4.1-5.1%). These WTP values increased significantly when any of the BHI's copayments (reimbursement ceiling, deductible, or coinsurance) were removed. The study also found that WTP was higher than estimates of the cost of BHI based on past health expenditure or premium contributions of formal sector workers. The study used equity weighting to adjust for income inequality in the distribution of WTP values. The results showed that mean WTP for BHI increased with inequality aversion. In multiple regression analysis, a 1% increase in income was associated with a 0.434-0.499% increase in WTP for BHI, and a 1% increase in past health expenditure was associated with a 0.076-0.148% increase in WTP for BHI. Being male, a migrant, or without permanent employment significantly decreased WTP for BHI. Education was not a significant determinant of WTP for BHI. The study concludes that Chinese municipal governments should allow informal sector workers to participate in the BHI. From a normative perspective, BHI for informal sector workers is likely to increase social welfare because average WTP for BHI is significantly higher than estimates of the average cost of BHI. The study also finds that informal sector workers do not value BHI as a mechanism to recover small financial losses from common illnesses, but because it protects against large financial losses from catastrophic care. From a behavioral perspective, the study predicts that 35% of informal sector workers will enroll in the BHI if the price equals the average premium contribution of formal sector workers. Subsidies and changes in insurance attributes (e.g., including catastrophic care and portability) should be effective in increasing BHI coverage. In addition, coverage should expand with rising incomes among informal sector workers in China. Adverse selection will be unlikely to be a large problem if the BHI is offered to informal sector workers.This study investigates the willingness to pay (WTP) for basic health insurance (BHI) among informal sector workers in Wuhan, China, using a contingent valuation method. The study found that informal sector workers were willing to pay an average of 30 RMB (95% CI 27-33) for BHI and 4.6% of their income (95% CI 4.1-5.1%). These WTP values increased significantly when any of the BHI's copayments (reimbursement ceiling, deductible, or coinsurance) were removed. The study also found that WTP was higher than estimates of the cost of BHI based on past health expenditure or premium contributions of formal sector workers. The study used equity weighting to adjust for income inequality in the distribution of WTP values. The results showed that mean WTP for BHI increased with inequality aversion. In multiple regression analysis, a 1% increase in income was associated with a 0.434-0.499% increase in WTP for BHI, and a 1% increase in past health expenditure was associated with a 0.076-0.148% increase in WTP for BHI. Being male, a migrant, or without permanent employment significantly decreased WTP for BHI. Education was not a significant determinant of WTP for BHI. The study concludes that Chinese municipal governments should allow informal sector workers to participate in the BHI. From a normative perspective, BHI for informal sector workers is likely to increase social welfare because average WTP for BHI is significantly higher than estimates of the average cost of BHI. The study also finds that informal sector workers do not value BHI as a mechanism to recover small financial losses from common illnesses, but because it protects against large financial losses from catastrophic care. From a behavioral perspective, the study predicts that 35% of informal sector workers will enroll in the BHI if the price equals the average premium contribution of formal sector workers. Subsidies and changes in insurance attributes (e.g., including catastrophic care and portability) should be effective in increasing BHI coverage. In addition, coverage should expand with rising incomes among informal sector workers in China. Adverse selection will be unlikely to be a large problem if the BHI is offered to informal sector workers.