This paper uses national health expenditure data in Taiwan from 1954 to 1999 to construct time series and threshold models and to explore the determinants of the growth of health expenditure. Results indicate that, per capita GDP, the ratio of insured, doctors and beds per capita, and unemployment rate, are all key factors affecting the growth of health expenditure. We also uses per capita GDP, the ratio of insured, doctors and beds per capita, and unemployment rate to be the threshold variables, respectively, to test the structure changes of the health expenditure. Results reveal that per capita GDP is the most important factor determining health expenditures, but the existence of medical insurance may mitigate this effect. Finally, the growth of unemployment rate increases medical care expenditure.