Objective: To investigate the operation data of the New Rural Cooperative Medical Scheme (NCMS) fund in Shaanxi province, analyze the cost burden and compensation benefits of the NCMS in order to provide reference for further improving the medical insurance policy. Methods: Using the stratified sampling method to select 41 counties in Shaanxi province. The data were collected from NCMS operational data of the sample county, and SPSS was used for statistical and descriptive analysis. Results: With the advancement of the NCMS, the level of the participation rate and funding of NCMS in Shaanxi province has steadily increased year by year, and the participation rate has reached over 95% in 2009. The protect level of NCMS has been continuously improved, and significant increase in access to health care services of the participating farmers. The proportion of reimbursement increased steadily and remained at an average of 50%. However, the average hospitalization cost increased rapidly, coupled with unreasonable hospitalizations and the flow of funds, which weakened the benefits of participating farmers" compensation. Conclusions: After years of construction and reform, the operation of NCMS in Shaanxi province has achieved obvious results. The coverage has continued to expand, the compensation level is increasing gradually. Overall the NCMS has reduced the economic burden on the farmers. However, the in-patient service utilization structure was not rational in different level hospitals, still need to further improve the compensation level and advance medical insurance payment reform.