Lack of funding in health sector renewed the interests of development practitioners and policy makers in community organized, managed and funded health care delivery schemes. To design a community health programme for rural areas, developing countries should evaluate the appropriateness of the Cooperative Medical System (CMS) of China as an alternative model. In this research, successful CMS units of China are examined to identify factors affecting long-term viability of community-based Health insurance plans. These factors can be grouped into a number of programmatic aspects of health system organization: choosing appropriate human resource mix consistent with the economic status of community members, designing a benefit package to encourage participation of both poor and non-poor households, developing administratively simple premium setting and collection mechanism, ensuring inter-CMS collaboration and developing well-functioning referral system. Adjusting for the income difference between Bangladesh and China, Chinese health care costs can be used as a rough guide for estimating the health care resource requirements for implementing a CMS-type programme. Adjusting the Chinese data for Bangladesh income and prices, the premium level becomes Taka 10 to 15 per person per month. this premium will not allow appointment of a fully qualified physician at the village, ward or union levels. In fact, the premium level can pay only about Taka 1,500 to 2,500 per month for a village doctor, keeping aside 55% of total premium collected for drugs, supplies and diagnostic tests. The Chinese experience also implies that a well-functioning health system should allocate about 30 to 35% of total health care costs at the local level, below the upazila level for Bangladesh. This will ensure access to basic health care services for community members and will provide partial financial protection against costs incurred at secondary and tertiary levels of health care delivery infrastructure.