BackgroundAlthough public medical insurance covers over 95% of the population in China, disparities in health service use and out-of-pocket (OOP) health expenditure across income groups are still widely observed. This study aims to investigate the socio-economic disparities in perceived healthcare needs, informal care, formal care and payment for healthcare and explore their equity implication.MethodsWe assessed healthcare needs, service use and payment in 400 households in rural and urban areas in Jiangsu, China, and included only the adult sample (N = 925). One baseline survey and 10 follow-up surveys were conducted during the 7-month monitoring period, and the Affordability Ladder Program (ALP) framework was adopted for data analysis. Negative binomial/zero-inflated negative binomial and logit regression models were used to explore factors associated with perceived needs of care and with the use of self-treatment, outpatient and inpatient care respectively. Two-part model and logit regression modeling were conducted to explore factors associated with OOP health expenditure and with the likelihood of incurring catastrophic health expenditure (CHE).ResultsAfter adjusting for covariates, rural residence was significantly associated with more perceived healthcare needs, more self-treatment, higher probability of using outpatient and inpatient service, more OOP health expenditure and higher likelihood of incurring catastrophic expenditure (P < 0.05). Compared to the Urban Employee Basic Medical Insurance (UEBMI), enrollment in the New Rural Cooperative Medical Scheme (NRCMS) or in the Urban Resident Basic Medical Insurance (URBMI) was correlated with lower probability of ever using outpatient services, but with more outpatient visits when people were at risk of using outpatient service (P < 0.05). NRCMS/URBMI enrollment was also associated with higher likelihood of incurring CHE compared to UEBMI enrollment (OR = 2.02, P < 0.05); in stratified analysis of the rural and urban sample this effect was only significant for the rural population.ConclusionsThe rural population in Jiangsu perceived more healthcare needs, had a higher probability of using both informal and formal healthcare services, and had more OOP health expenditure and a higher likelihood of incurring CHE. The inequity mainly exists in health care financing, and may be partially addressed through improving the benefit packages of NRCMS/URBMI.