As an important component of the multi-level healthcare security system in China, commercial health insurance can effectively reduce individual payment ratios, reasonably share medical expenses, and promote the overall improvement of medical and health services. In recent years, China's commercial health insurance has entered a new stage of social insurance-commercial insurance integration after rapid development. However, the development of commercial health insurance also faces a series of challenges, including insufficient product innovation, lack of standardization system, limited policy support, insufficient industry integration, difficulties in data sharing, and unsatisfactory claims. In view of this, this study proposes the following optimization and development suggestions. The positioning and scope of commercial health insurance should be further clarified, the standard system of commercial health insurance drug catalog should be improved, and the expansion and improvement of commercial health insurance should be promoted, better adapting to the requirements of DRG/DIP payment reform. The managed healthcare insurance model can be explored and deep collaboration and integrated development between the insurance industry and other healthcare sectors should be promoted. In addition, it is necessary to strengthen policy incentives and support, promote the construction of data sharing mechanisms, and optimize service processes to assist in the implementation of the Healthy China Initiative.