Included in Government Work Reports for 6 Consecutive Years: How Can Long-Term Care Insurance Enable More People to "Enjoy Protection in Old Age"?

During the 14th Five-Year Plan period, the Long-term Care Insurance (LTCI) system will shift from pilot programs to full implementation. The change from “establishing” to “promoting” may seem subtle, but it reflects the accelerating move toward comprehensive coverage of this key system to address population aging.

By the end of 2025, China’s elderly population aged 60 and above will reach 323 million, accounting for 23% of the total population. As the silver wave accelerates, a pressing issue affecting millions of families’ happiness is increasingly prominent—how to provide reliable care for 45 million disabled and cognitively impaired seniors.

In 2026, Long-term Care Insurance (LTCI) was included in the government work report for the sixth consecutive year. When reviewing the significant achievements in ensuring people’s well-being over the past year, it was noted that “the LTCI system covers 300 million people”; and in the deployment of this year’s efforts to better safeguard and improve people’s livelihoods, it was proposed to “promote the LTCI system.”

This is the first time the term “promote” appears in the government work report regarding LTCI, marking a crucial stage where the system will move from pilot exploration to nationwide implementation.

From Pilot to Full Implementation

LTCI is a social insurance system that provides basic daily care and related nursing services for individuals who are unable to care for themselves due to aging, illness, or disability. It is called the “sixth social insurance” after the five major insurances: pension, medical, unemployment, work injury, and maternity.

In June 2016, the Ministry of Human Resources and Social Security issued the “Guiding Opinions on the Pilot Program for Long-term Care Insurance,” launching China’s LTCI pilot. It proposed using 1-2 years for experience accumulation, aiming to establish a policy framework for LTCI that aligns with China’s socialist market economy during the 13th Five-Year Plan period.

In September 2020, the National Healthcare Security Administration and the Ministry of Finance issued the “Guiding Opinions on Expanding the LTCI Pilot,” gradually expanding the pilot to 49 cities. It also clarified the goal to establish a LTCI policy framework suitable for China’s economic development level and aging trend during the 14th Five-Year Plan, promoting a multi-layered LTC support system that meets diverse public needs.

Looking ahead to the next five years, the 14th Five-Year Plan further proposes to promote LTCI, improve the care system for disabled and cognitively impaired seniors, and expand rehabilitation, nursing, and palliative care services.

In fact, reviewing recent government work reports reveals a clear progressive trend in the description of LTCI: from 2021 to 2023, it was consistently stated that “the LTCI pilot is being steadily promoted”; in 2024, the term “pilot” was removed, and it was proposed to “advance the establishment of LTCI”; by 2025, the goal is to “accelerate the establishment of LTCI,” speeding up implementation; and in 2026, it further clarifies to “promote LTCI.”

The subtle shift from “establishing” to “promoting” reflects the rapid move toward full coverage of this vital system to address aging.

According to Zhang Ke, Secretary of the Party Leadership Group and Director of the National Healthcare Security Administration, nearly 300 million people have been covered by LTCI pilot programs, benefiting over 3.3 million disabled individuals, with fund expenditures exceeding 100 billion yuan, reducing individual burdens by about 12,000 yuan annually.

“During the 14th Five-Year Plan period, LTCI will shift from pilot to full implementation,” Zhang said. The administration will accelerate efforts to develop a Chinese-characteristic LTCI system, gradually cover the entire population, initially focus on severely disabled individuals, and continue refining service processes, standardizing operations, and strengthening quality control throughout the entire process to drive service quality improvements.

Overcoming Three Major Bottlenecks

While the system framework is becoming clearer, the full implementation of LTCI still faces many practical challenges.

Juson Shen, Postdoctoral Fellow and Professor of Applied Economics at Peking University, analyzed in an interview with the International Finance News that first, the system lacks uniformity. Differences across regions in disability assessment standards, benefit levels, funding methods, and service access rules restrict the system’s replicability and nationwide promotion.

Second, the sustainability of the fund faces increasing pressure. As aging accelerates and the disabled and cognitively impaired population grows, relying mainly on medical insurance funds becomes difficult to sustain long-term.

Third, the capacity of nursing service supply remains insufficient. Shortages of professional caregivers, uneven service capabilities of institutions, and weak home and community care systems can lead to issues of “policy, but no service.”

To break through these bottlenecks, Shen suggests that, on one hand, the national level should accelerate top-level design, unify disability assessment and benefit frameworks, and enhance system coordination nationwide; on the other hand, multiple funding mechanisms should be developed to ease fund pressure, guiding individuals, employers, and commercial insurance to share risks reasonably.

“At the same time, we should accelerate the development of the LTC service industry through price mechanisms, payment reforms, and workforce development, to improve service capacity and make LTCI a truly affordable, sustainable, and service-oriented social security system,” Shen said.

Public concern is also reflected in the focus of the two sessions. During this year’s National People’s Congress (NPC) and Chinese People’s Political Consultative Conference (CPPCC), many delegates and committee members offered practical suggestions to improve LTCI.

Yan Jianguo, a National People’s Congress deputy and chief partner at Beijing Xinli Law Firm, stated that China’s LTCI has accumulated certain practical experience and achieved phased results. However, due to the lack of nationwide unified laws, regulations, and systematic institutional design, many prominent issues remain in implementation. Legislation is urgently needed to improve and unify the system, ensuring LTCI benefits all elderly with needs.

He recommends establishing a unified national LTCI implementation regulation based on legislation, focusing on solving policy fragmentation, and promoting standardization in disability assessment, funding, benefit payments, service catalogues, operational standards, and information systems.

“Moving LTCI from pilot to full coverage requires breakthroughs in three key areas: where the funds come from, who provides the services, and standardization,” said Jin Li, member of the National Committee of the Chinese People’s Political Consultative Conference and Vice President of Southern University of Science and Technology. The biggest weakness is the narrow funding channels, as most pilot cities rely on transfers from medical insurance funds, increasing payment pressure. The key to breakthroughs lies in establishing independent, diversified funding mechanisms and clarifying the sharing ratios among individuals, employers, and the government.

Deepening Public-Private Partnership

As LTCI moves toward full coverage, commercial insurance companies, as important social forces, play a crucial role.

Zhou Yanfang, a deputy of the National People’s Congress and director of the Strategic Research Center (ESG Office) of China Pacific Insurance, stated that all pilot cities have established a new social-private cooperation mechanism based on “government operation with social participation as supplement,” adopting a separation model where the healthcare department oversees and commercial insurers handle operations.

Cities like Shanghai, Ningbo, Guangzhou, and Fuzhou entrust commercial insurers to manage the program through “funds not transferred, services purchased”; Chengdu, Nantong, Tianjin, and Nanning adopt “funds transferred, services purchased”; over 40 other cities use “funds transferred, risk sharing” models.

However, in practice, many insurers face issues such as unsustainable operations, insufficient profit margins, and imperfect systems.

To address these issues, Zhou recommends improving operational mechanisms and policy support, drawing on mature experiences from urban and rural major disease insurance, to enable high-quality development of policy-based LTC insurance by commercial insurers.

Specifically: first, reduce policy costs and implement the principle of breakeven with profit. Provide tax reductions, administrative fee waivers, and insurance fund exemptions for LTCI insurers to lower operational costs.

Second, establish independent management mechanisms similar to major disease insurance, with separate accounts, calculations, assessments, and supervision, ensuring strict separation between policy-based and commercial insurance operations.

Third, deepen government-private collaboration to supplement the capacity of healthcare administration. Continuously improve the regulatory and operational models, leveraging the expertise of commercial insurers to undertake more management tasks, achieving separation of management and operations for efficient functioning.

Xu Debin, Deputy General Manager of China Life Jiangsu Province’s Health Insurance Department, emphasized that insurers should leverage their networks and expertise to participate deeply in LTCI operations, coordinating with medical, elderly care, and community service institutions to build a home-based, community-supported, and institution-supplemented LTC service network. Developing commercial LTCI products to form a multi-layered supply system of basic protection plus commercial supplements will help ensure the steady and sustainable development of LTCI systems.