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This study examines the development of social health insurance (SHI) in Vietnam between 1992 and 2016. SHI developmental stages have been identified from legislative changes which led to change in SHI functioning. It has been divided into five stages: Stage I (1992–1998), Stage II (1998–2005), Stage III (2005–2008), Stage IV (2008–2014), and Stage V (2014 onwards). In addition, SHI’s role as a financial mechanism towards achieving universal health coverage (UHC) has been discussed. It is suggested that Vietnam should focus on improving population coverage rather than further expanding the benefit package to achieve UHC.