BACKGROUND:China's fragmentation of social health insurance schemes has become a key obstacle that hampers equal access to health care and financial protection. This study aims to explores if the policy intervention Urban and Rural Residents Basic Medical Insurance (URRBMI) scheme, which integrates Urban Resident Basic Medical Insurance (URBMI) and New Rural Cooperative Medical Scheme (NCMS), can curb the persistent inequity of catastrophic health expenditure (CHE) and further analyses the determinants causing inequity. METHODS:Data were derived from the Fifth National Health Service Survey (NHSS). A total of 11,104 households covered by URRBMI and 20,590 households covered by URBMI or NCMS were selected to analyze CHE and the impoverishment rate from medical expenses. Moreover, the decomposition method based on a probit model was employed to analyse factors contributing CHE inequity. RESULTS:The overall incidence of CHE under integrated insurance scheme was 15.53%, about 1.10% higher than the non-integrated scheme; however, the intensity of CHE and impoverishment among the poorest was improved. Although CHE was still concentrated among the poor under URRBMI (CI = -0.53), it showed 28.38% lower in the degree of inequity. For URRBMI households, due to the promotion of integration reform to the utilization of rural residents' better health services, the factor of residence (24.41%) turns out to be a major factor in increasing inequity, the factor of households with hospitalized members (- 84.53%) played a positive role in reducing inequity and factors related to social economic status also contributed significantly in increasing inequity. CONCLUSION:The progress made in the integrated URRBMI on CHE equity deserves recognition, even though it did not reduce the overall CHE or the impoverishment rate effectively. Therefore, for enhanced equity, more targeted solutions should be considered, such as promoting more precise insurance intervention for the most vulnerable population and including costly diseases suitable for outpatient treatment into benefit packages. Additionally, comprehensive strategies such as favourable targeted benefit packages or job creation are required for the disadvantaged.