The basic medical insurance system, as a crucial component of the healthcare security system, plays a significant role in managing medical costs. This study explores the impact of cost-sharing mechanisms, payment method reforms, and types of medical insurance on the growth of medical costs through theoretical analysis and empirical research. The findings reveal that cost-sharing mechanisms and payment method reforms significantly inhibit the growth of medical costs. Employees' basic medical insurance and urban and rural residents' basic medical insurance demonstrates institutional differentiation in cost management due to differences in fundraising levels, cost-sharing structures, and supervision capabilities. However, issues of information asymmetry and moral hazard undermine the effectiveness of the medical insurance system in managing costs. Heterogeneity analysis indicates that the effects of cost-sharing mechanisms and payment method reforms vary significantly across different income groups and regions, with more prominent policy effects among high-income groups and economically developed regions. Based on the research conclusions, policy recommendations are proposed, including optimizing cost-sharing mechanisms, promoting payment method reforms, strengthening medical service supervision, and enhancing the fairness of the medical insurance system. This study provides important theoretical and empirical support for optimizing the design of the medical insurance system and improving the management of medical cost.