Video | What are the standards for different groups of people to pay for long-term care insurance? What benefits do they receive? Explained in one article

Recently, the General Office of the CPC Central Committee and the General Office of the State Council issued the “Opinions on Accelerating the Establishment of a Long-Term Care Insurance System,” proposing that by the end of 2028, the long-term care insurance (LTCI) system will be basically covered nationwide. China’s social security system is gradually moving into the “six-insurance-and-one-fund” era. On March 26, eight departments including the National Healthcare Security Administration, the Ministry of Civil Affairs, and the Ministry of Finance jointly issued the “Implementation Plan for Accelerating the Establishment of a Long-Term Care Insurance System,” clarifying the contribution standards for various groups.

When the public participates in LTCI, what standards are contributions based on?

The “Implementation Plan” clarifies that, according to the principle of territorial administration, employers and employees of the employer, retirees, flexible employment workers, and unemployed urban and rural residents, among others, participate in LTCI.

① How do employees of work units make contributions?

For employees of work units who participate in LTCI, contributions are jointly paid by the employer and the individual employee, and are paid together with basic medical insurance premiums. Rates are reasonably determined based on the national benchmark rate; the overall rate is controlled at around 0.3%, with the employer and the individual sharing the cost in equal proportions of about 0.15% each. The contribution base for the employer is the total wage amount of the employees; the contribution base for the individual is the individual’s wage income. An employee’s basic medical insurance individual account can be used for the individual’s own LTCI contribution and for the LTCI contributions of close relatives.

Suppose an employee’s monthly income is 10,000 yuan; the individual contributes 15 yuan per month, the employer also contributes 15 yuan, for a total of 30 yuan.

② How do unemployed urban and rural residents make contributions?

LTCI for unemployed urban and rural residents raises funds annually and is paid together with basic medical insurance premiums for urban and rural residents. Funding is made up of individual contributions and government subsidies, with their ratio at around 1:1. In the year when a locality establishes an LTCI system, the contribution rate for unemployed urban and rural residents starts at half of 0.15% or thereabouts and is gradually transitioned to around 0.3% over about 5 years; localities with the conditions may also start at around 0.3%. The contribution base is the per-capita disposable income of urban and rural residents in the previous year in the overall planning area.

Suppose a locality’s per-capita disposable income of residents in the previous year is 40k yuan; in the year the system is implemented, the contribution rate is calculated as 0.15%. Then the annual contribution is 60 yuan, composed of individual contributions and government subsidies at a ratio of 1:1, i.e., each承担30元.

③ How do retirees make contributions?

For retirees, contributions are paid by the individual, and the original employer does not contribute. The rate is the same as the individual contribution rate for employees of work units, at around 0.15%. The contribution base is the individual’s basic pension. With the individual’s consent, the premium payment can be deducted on behalf of the individual from their employee basic medical insurance individual account by the healthcare insurance department; in localities with the conditions, it can also be deducted by the social insurance经办机构 that disburses the basic pension.

Suppose a retiree’s monthly retirement pension is 5,000 yuan; at a rate of 0.15%, the monthly contribution is 7.5 yuan, borne by the retiree personally.

④ How do flexible employment workers make contributions?

Flexible employment workers are encouraged to enroll under the contribution rate standards for employees of work units, with individuals paying according to regulations, at a rate of around 0.3%, and the contribution base may be determined as a certain proportion of the previous year’s average social wage in the overall planning area (not less than 60%); flexible employment workers can also choose to enroll and make contributions under the policy for unemployed urban and rural residents.

⑤ How do people in hardship groups make contributions?

The government provides categorized financial assistance to the individual contribution portion of eligible hardship groups, fully subsidizing people in extreme poverty; it provides fixed-amount subsidies to eligible subsistence allowance recipients and to eligible groups targeted by programs to prevent returning to poverty and falling into poverty again.

⑥ How do persons under 18 years old make contributions?

Unemployed persons under 18 years old enroll along with their parents or other legally responsible guardians, etc., without separate fund-raising; those who meet the conditions to receive benefits enjoy benefits according to the standards for unemployed urban and rural residents. Orphans and children without anyone actually to raise them who cannot enroll alongside a guardian may be treated as if they were enrolled.

What benefits can one enjoy by participating in LTCI?

When participating in LTCI, people also care about benefit protection—how to receive benefits and what benefits can be enjoyed.

The “Implementation Plan for Accelerating the Establishment of a Long-Term Care Insurance System” clarifies that those who enroll and contribute according to regulations and whose disability status generally lasts for more than 6 months, and disabled persons whose disability status has been assessed and recognized through application, may, in accordance with regulations, enjoy the relevant benefits. In the start-up phase of the LTCI system, it mainly protects severely disabled persons who are bedridden for the long term and unable to care for their own daily lives. There is no minimum deductible amount for receiving LTCI benefits.

The long-term care service costs that comply with regulations,

• if enrolled under the policy for unemployed urban and rural residents, the fund payment proportion is about 50%;
• if enrolled under the policy for employees of work units, the fund payment proportion is about 70%, and retirees enjoy the benefits under the employees of work units enrollment policy;
• flexible employment workers receive the corresponding benefits based on the type of enrollment policy they choose.

The annual maximum fund payment limit for enrolled persons must not exceed 50% of the per-capita disposable income of urban and rural residents in the previous year in the overall planning area.

Encourage the use of home-based and community care services, and give appropriate preference in the payment proportion.

The LTCI fund is mainly used to pay for the costs incurred for long-term care basic services that meet the requirements, and in principle it does not directly issue cash to disabled persons.

The “Implementation Plan” proposes exploring the establishment of a continuous enrollment incentive mechanism that links contribution duration with the level of benefits received, and for those with continuous enrollment, appropriately increasing the payment proportion in accordance with regulations. Except for special groups such as newborns, for cases where a person first enrolls at the time of initial enrollment after an LTCI system in the locality has already been launched, and for cases where a person enrolls again after interrupting contributions, constraint measures such as setting a waiting period for benefit eligibility and reducing the benefit level on a temporary basis should be formulated. The waiting period for benefit entitlement is generally set at 6 months in principle and is extended accordingly as the number of years without contributions increases.

For non-care service expenses such as institutional bed fees and meal fees, as well as medical expenses that should be paid by medical insurance, the fund will not provide payment. Enrolled persons who receive nursing care living allowance under work injury insurance do not receive LTCI-related service benefits more than once.

Related Readings

Opinions of the General Office of the CPC Central Committee and the General Office of the State Council on Accelerating the Establishment of a Long-Term Care Insurance System>>

Eight departments issued the “Implementation Plan for Accelerating the Establishment of a Long-Term Care Insurance System”>>