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Background: China has since the beginning of this millennium engaged in substantial Universal Health Coverage (UHC) reforms. This paper adds evidence on how equity in level of health service utilization changed after UHC reforms. Methods: Our study was based on household survey data from 30 counties in Sichuan province in 2004 and 2011. We introduce an unusual outcome variable, namely level of healthcare utilization. Concentration index (CI) was used to measure income based inequality in level of healthcare utilization. Horizontal index (HI) was used to assess whether inequalities are inequitable. We decomposed the concentration index to measure the factors contributing to inequality in level of utilization. Oaxaca type decomposition was applied to control whether identified changes were attributable to changed inequality or to other factors. Results: Pro-rich inequity in level of healthcare utilization increased after UHC reforms. Overall, a higher proportion of users sought services at county hospitals or higher in 2011 compared with 2004. Richer users were considerably more likely than the poor to seek care at hospitals rather than at clinics or health centers, and the pro-rich inequality in level of healthcare utilization was highly inequitable. Insurance enrollment became the main driver of pro-rich inequity in level of healthcare utilization after reforms, while health needs became less important for determining level of care, all disfavoring low income groups. Conclusions: Assessments of equity should pay attention to inequalities in level of healthcare utilization. Our results indicate that in China, wide insurance coverage is insufficient to ensure equity in level of healthcare utilization. On the contrary, type of insurance enrollment has become a main driver of inequity in level of utilization. Hence, equalizing health insurance schemes would be of crucial importance in order to improve health equity in China. Moreover, UHC reforms should strengthen the primary sector and limit non-needs based use of high-level hospitals in order to promote equitable use of healthcare services. [ABSTRACT FROM AUTHOR]