China is moving forward with a nationwide rollout of long-term care insurance, a new component of the country’s social security system often referred to as the “sixth insurance.” The initiative, formally outlined in “Opinions on Accelerating the Establishment of a Long-Term Care Insurance System” released Tuesday, aims to provide financial support for individuals who require sustained assistance with daily living. Officials say the system will be substantially implemented across the country by the end of 2028, addressing a growing need as China’s population ages and the prevalence of chronic illnesses increases.
The long-term care insurance system is designed to pool funds through universal participation, offering periodic financial assistance for covered individuals who lose the ability to perform everyday activities. This includes both regular living support and necessary medical nursing care. The move represents a significant expansion of China’s social safety net, addressing a gap in coverage that has historically placed a substantial financial and emotional burden on families.
What Services Will Be Covered?
According to a report from China Central Television (CCTV), the National Healthcare Security Administration has established a national unified catalog of long-term care services. This catalog includes 36 services deemed essential for individuals with severe disabilities. These are broken down into two main categories: 20 services related to basic daily living, such as assistance with eating, bathing, oral hygiene, and pressure sore care, and 16 foundational medical services, including suctioning and catheterization. CCTV’s full report details the scope of these services.
Wang Wenjun, Vice Administrator of the National Healthcare Security Administration, emphasized the potential impact of the system. “Through professional care,” she stated, “we can greatly improve the quality of life for people with disabilities, making bathing, haircuts, meals, and medication changes no longer a ‘luxury on a hospital bed.’” She added that the system aims to alleviate the dual burden of financial strain and caregiving responsibilities for families.
How Will the System Be Funded?
The long-term care insurance system will be universally accessible, with contribution rates capped at around 0.3%. Funding mechanisms vary depending on employment status. For employed individuals, the premium will be split equally between employers and employees. Unlike medical insurance, retirees will also be required to contribute, with premiums linked to their pension levels and paid individually, without employer contributions. Unemployed urban and rural residents will share the cost through individual contributions and government subsidies, funded by both central and local finances.
Notably, individuals under 18 years of age will be covered through their parents or legal guardians without requiring separate premium payments. Personal account funds from existing employee basic medical insurance can be used to cover individual contributions to the long-term care insurance program.
Eligibility and Benefit Levels
The system is designed for individuals with disabilities. Eligibility will be determined through a standardized assessment process, classifying disability levels as mild, moderate, or severe. Zhang Xifan, an official with the National Healthcare Security Administration’s Treatment Guarantee Department, stated that a “single ruler” will be used nationwide to ensure consistent evaluation standards. The National Healthcare Security Administration’s website provides further details on the assessment process.
Long-term care insurance funds will primarily be used to pay for services provided by approved institutions, rather than direct cash payments to individuals. This approach is intended to ensure funds are used specifically for caregiving purposes. To ensure the sustainability of the fund, an annual maximum payment limit has been established, capped at 50% of the per capita disposable income of urban and rural residents in the relevant region.
Applying for Benefits and Future Implementation
Individuals requiring long-term care or their families can apply for benefits through designated medical insurance service windows or online channels. Required documentation includes identification, an application form, and relevant medical records, such as hospital discharge summaries or diagnostic reports. Huang Xinyu, Director-General of the Medical Service Management Department of the National Healthcare Security Administration, emphasized the standardization of procedures, materials, and timelines nationwide.
The National Healthcare Security Administration has established a unified national long-term care insurance subsystem to streamline operations, standardize data collection, and facilitate cross-regional benefit portability. Efforts are also underway to promote online and mobile access to long-term care services.
As of the announcement, China has over 12,000 designated long-term care service institutions with approximately 370,000 professionals. Since the initial pilot programs began in 2016, the long-term care insurance system has reportedly attracted over 600 billion yuan (approximately $83.7 billion USD as of January 27, 2024) in social capital investment into related industries.
The implementation of this “sixth insurance” represents a significant step towards building a more comprehensive and equitable social security system in China, addressing the growing needs of an aging population and providing crucial support for individuals and families facing the challenges of long-term care. The next key milestone will be the continued expansion of the system to achieve near-universal coverage by the end of 2028, with ongoing monitoring and adjustments to ensure its effectiveness and sustainability.
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