This paper examines the impact of micro health insurance on poverty reduction in rural areas of Bangladesh. The research is based on household level primary data collected from the operating areas of the Grameen Bank during 2006. A number of outcome measures relating to poverty status are considered; these include household income, stability of household income via food sufficiency and ownership of non-land assets, and also the probability of being above or below the poverty line. The results show that micro health insurance has a positive association with all of these indicators, and this is statistically significant and quantitatively important for food sufficiency.