In order to investigate the inequality about health expenditure, we test two hypothesis of health expenditure convergence, and find that there is no single convergence in the nationwide, only convergence by cluster. In addition, we investigate the long-run relationship between health expenditure inequality, income inequality, and provincial government budget deficits by using new panel cointegration tests with health expenditure data in China's urban and rural areas. We find that the income inequality and real provincial government budget deficits are useful in explaining the disparity in health expenditure prevailing between urban and rural areas. In order to reduce health-spending inequality, we should carry out the support from wealthy coastal regions to poverty in rural areas and focus on fiscal policy shifting.