This thesis examines the introduction of compulsory medical insurance in the Russian Federation in the 1990s as part of the re-structuring of welfare in the years after communism - why it was introduced and how it has developed. The reforms brought in strong decentralisation of governance to the regions and localities in comparison to Soviet rule. It argues that minimal national legislation and guidance, subsequent adjustments in the face of implementation problems and a pattern of “negotiated federalism” have led to wide variation in regional systems with Russia. This thesis looks in particular at implementation in two federal units (from 89): Volgograd Oblast’ and St. Petersburg City. In the first part, it considers the decision to introduce insurance in the context of the international health care debate, and examines the relationship between health care reform and broader issues of the “transition” away from communism to the market. Particular attention is drawn to how these two discourses in practice have run contrary to each other. It also documents experimental internal market health reform in the Gorbachev era in Leningrad (St. Petersburg), as well as genesis, formulation and implementation of health insurance at the national level. The main body of the thesis examines the development of compulsory health insurance in the two research sites. Of particular significance is found to be: the impact of financial shortages on the viability of insurance; the extent to which elements of Russian local government reform can undermine regional health care governance; the innovation of decentralisation and the introduction of elements of contract and negotiation in place of vertical command and control structures; and conflict between parastatal health funds and insurance companies. In general the St. Petersburg system was more successful and less conflictual than that in Volgograd Oblast’. The former was fortunate in its local government structures and in its legacy of institutional reform in health care, but also key policy choices have simplified the system’s operation and legitimacy. In Volgograd Oblast’ the system suffers from over-complexity, institutional conflict and a lack of clear and effective governance structures.