Paying premiums for insurance benefits is one of the important characteristics of a social insurance system. The financing of social insurance is absolutely separate from the governmental budget. But it is also a normal practice in many social welfare states that the government often supports its financing with taxes. In Taiwan, due to the compulsory subscription of insurance and premium payment imposed on all citizens, the national health insurance system is not only based on the premium-benefit-principle, but also on the combined factors of social welfare benefits, social compensation and social promotion, namely a combination-type of social insurance. The government subsidizes most of the insured in Taiwan in the payment of their premiums and is therefore involved in the financing of social insurance. In such a case, what is the relationship between the financing of social insurance and that of the governmental budget? Is the government bound to subsidize the insured in paying their premiums or to support the financing of social insurance? In accordance with the vertical division of powers, are local self-governing bodies also obligated to promote the social insurance system and share the financial burden? With regard to the above questions this article is firstly conducted to elucidate the separate financing of social insurance from national budget and clarify the functions of government in the financing of social insurance. This article is further conducted to analyze the social policies which were accomplished through the subsidizing of premiums with respect to different categories of the insured. We have to look directly at the purpose of the subsidy, according to the principle of the connection of duty and finance, so that we may further analyze seperately which policy and its financial burden should be undertaken either by the central government or by local self-governing bodies. In this respect the Judicial Yuan Interpretation No. 550 which declares that not only the central government but also the local self-government bodies have the duty to promote the national health insurance, and the judgment of the Supreme Administrative Court, which clarifies the extent of subsidy to be covered by local self-governing bodies based on the location of the agencies of the insured, requires more consideration and argumentation for improvement and implementation.