By using the National Health Insurance expenses announced in the annual statistical reports by the Department of Health between the year 2002 and 2005 as research samples, this paper applies the Grey Model (1, 1) to predict different medical expenses in 2006, and figure out the factors having the most important influence on these different medical expenses. Except the accuracy level of forecasts for the medical expenses of outpatient services and hospitalizations for the western medicine hospitals without accreditation, all accuracy levels are all above 90%. This demonstrates that GM is applicable to predict the medical expenditures of Bureau of National Health Insurance. The findings of the experiments conducted in this paper clearly show us the predictive values of different medical expenses and the factors having the most important influence on these different medical expenses. Based on the results, this paper suggests Bureau of National Health Insurance and relevant departments to place the emphasis of future reform on the areas of emergency treatments, local hospitals, and Chinese medicine outpatient services.