In 2007, China launched a subsidized voluntary public health insurance program, the Urban Resident Basic Medical Insurance, for urban residents without formal employment, including children, the elderly, and other unemployed urban residents. We estimate the impact of this program on health care utilization and expenditure using 2006 and 2009 waves of the China Health and Nutrition Survey. Major findings indicate that this program has significantly increased the utilization of formal medical services and inpatient services; however, there is no evidence that it has reduced out-of-pocket expenditure. These results are robust to various specifications and multiple estimation strategies. We also find heterogeneous effects of the program for different age groups, income groups, gender and regions. The program has improved medical care utilization for the elderly, the low and middle income families, and urban residents in the relatively poor western region.