Long-term care insurance is being rolled out nationwide over three years, ushering in a "payment foundation" for the silver industry.

Why is Long-Term Care Insurance Entering the National Institutional Stage at This Time?

Interface News Reporter | Lü Wenqi

China’s long-term care insurance system is transitioning from “local trials” to “national establishment.”

On the evening of March 25, 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” (hereinafter referred to as “Opinions”), which clearly states that in about three years, a long-term care insurance system adapted to China’s basic national conditions will be basically established. This means that after nearly a decade of exploration, long-term care insurance will formally shift from scattered pilot programs to a national institutional arrangement, becoming an important component of the social security system.

Against the backdrop of accelerating aging and rapidly rising disability risks, the advancement of this system not only concerns the basic protection of tens of millions of disabled individuals but will also reshape China’s elderly care service supply system and open new development space for commercial insurance and the silver-haired industry.

Completing the “Last Piece of the Puzzle” for Disability Risk Protection

For a long time, China’s social security system has mainly revolved around two core areas: “pension” and “medical care”—pension insurance addresses income replacement issues, while medical insurance covers disease treatment costs. However, when the elderly lose their ability to care for themselves due to illness or aging, the continuous and high-intensity expenditures that long-term care entails have long lacked institutional protection. (See report: Eight years of pilot projects reduced burden by 80 billion, what are the remaining “pain points” for long-term care insurance to go national?)

Zhu Junsheng, a postdoctoral researcher and professor in applied economics at Peking University, stated in an interview with Interface News that the strongest signal released by this “Opinions” is that long-term care insurance is officially moving from “local pilot exploration” to “national institutional construction,” marking that the top-level design has been clarified, and the system’s implementation is entering an acceleration phase. Compared to previous pilots, this policy not only proposes a clear timeline but also achieves systematic institutional arrangements in key areas such as funding mechanisms, benefit frameworks, assessment systems, and management mechanisms.

In terms of institutional positioning, this change carries deeper significance. “It reflects an important shift in China’s social security system—from a ‘survival security system’ centered on pensions and medical care to an ‘all-life-cycle security system’ covering disability risks,” Zhu Junsheng pointed out.

As of now, the population aged 60 and above in China has exceeded 320 million, with approximately 35 million individuals classified as disabled or semi-disabled. Under the traditional model, long-term care has mainly been the responsibility of families, but as family structures become smaller and population mobility accelerates, this model is becoming increasingly difficult to sustain.

Yuan Shuai, deputy director of the Investment Department at the China Urban Development Research Institute, pointed out to Interface News that the core significance of fully establishing long-term care insurance lies in transforming individual risks into a social collective responsibility, constructing a care mechanism shared by families, society, and the government. “In the past, one person becoming disabled often meant pressure on the entire family, but institutional arrangements can significantly alleviate this structural pressure.”

At the same time, the nationwide rollout of the system also means that long-term care protection will move from regional disparities to a more unified institutional framework.

Zhu Junsheng believes that the goal of “coordinating urban and rural areas, covering all people” is not only a response to practical needs but also carries long-term strategic significance, helping to promote relative balance in long-term care protection across different regions and populations.

More importantly, long-term care insurance is not just a single payment tool but leverages the payment side to drive the construction of the service system. During the pilot process, basic infrastructures such as care institutions, home care services, and disability assessment systems have gradually formed, and the comprehensive establishment will further amplify the effect of “providing supply through payment.”

The Overlap of Demand Pressure and Institutional Maturity

Why choose this time for a nationwide rollout? Industry insiders believe that this decision is not coincidental but rather a comprehensive result of “demand pressure + institutional maturity + policy window.”

On one hand, the rapid rise in population aging and disability scale has transformed long-term care from “potential demand” to “rigid demand”; on the other hand, after nearly a decade of pilot programs, China has accumulated relatively mature experiences in funding mechanisms, disability assessments, and processing models, providing a realistic basis for institutional promotion.

Zhu Junsheng pointed out that advancing at this time essentially represents a phased leap from “locally feasible” to “overall necessary.” From a policy design perspective, the “Opinions” also reflect a clear cautious orientation. For example, it explicitly insists on “balancing income and expenditure, maintaining balance,” controlling the rate at a relatively low level, and ensuring the sustainability of the system through differentiated benefits and dynamic adjustment mechanisms.

International experiences also provide important references. Practices in multiple countries indicate that long-term care has the characteristics of “high probability of occurrence + high sustained expenditure,” and if the system expands too quickly without constraint mechanisms, it is prone to fund imbalance. Therefore, emphasizing actuarial constraints and dynamic adjustments in the early stages of the system is seen as a key prerequisite.

Although the top-level design has been clarified, challenges remain at the local level during the implementation process. Zhu Junsheng analyzed that the core difficulties in the implementation of long-term care insurance in the next three years will focus on balancing “sustainability and operability,” mainly reflected in three aspects.

First is the funding mechanism. The policy proposes diverse funding sources, but there are significant disparities in economic development levels across different regions, and the balance between rate setting, fiscal burden, and individual contributions still requires careful calculation and dynamic adjustment.

Second is the shortfall in service supply. Especially in grassroots and rural areas, issues such as insufficient nursing institutions, a shortage of professional caregivers, and inconsistent service standards will directly affect the effectiveness of institutional implementation.

Third is the capability for disability assessment and management. The core of long-term care insurance lies in “determining benefits based on assessment,” and if the assessment standards are not uniform or execution is not standardized, it will affect the fairness of the system and the efficiency of fund usage.

Additionally, unit contributions as one of the funding channels have also raised concerns about corporate costs. Zhu Junsheng pointed out that in the short term, it will indeed exert some pressure on labor costs for enterprises, especially small and medium-sized enterprises, but the policy has already tried to minimize marginal impacts through low rates and shared burdens.

Opening Up Space for Commercial Insurance and the Silver-Haired Industry

The “Opinions” clearly state that long-term care insurance is positioned as a “basic protection” social insurance, with funds primarily used to cover basic service costs. This positioning effectively delineates the boundaries for commercial insurance and industry development.

Song Zhanjun, deputy secretary-general of the China Insurance Research Institute at Beijing Technology and Business University, stated that the systematic construction of long-term care insurance will provide a foundation for the development of commercial long-term care insurance, promoting the formation of a multi-level care protection system.

Against the backdrop of continuously declining interest rates and pressure on traditional life insurance growth, some industry insiders regard long-term care insurance as one of the new growth breakthroughs for the insurance industry. (See report: The government work report again mentions long-term care insurance, the next increment for insurance companies)

Yuan Shuai pointed out that basic long-term care insurance covers fundamental care needs but has limited benefit levels, while commercial insurance can cater to mid-to-high-end needs, providing more flexible and personalized protection schemes, such as high-end nursing services and rehabilitation equipment support, thus forming a “basic + supplementary” layered structure.

More critically, long-term care insurance will provide a stable payment source for the silver-haired industry. Data shows that during the pilot phase, long-term care insurance has already attracted over 60 billion yuan in social capital investment. With the nationwide rollout of the system, this trend is expected to further strengthen.

From an economic perspective, long-term care services belong to a typical “strong demand, weak payment” industry, while long-term care insurance, through institutional payments, enhances the predictability of cash flow in the industry, significantly increasing capital’s willingness to enter.

At the same time, the “Opinions” propose exploring the inclusion of intelligent services and supportive aids into the payment scope, which is also seen as an important signal by industry insiders. Yuan Shuai believes this means that the spillover effect of long-term care insurance is extending from traditional nursing services to smart elderly care and medical technology fields, such as smart wearable devices and rehabilitation robots, which are expected to achieve large-scale application through inclusion in the payment system.

From a broader perspective, this interactive relationship will gradually form a silver-haired industry pattern of “government guidance, market participation, and diversified supply.”

Zhu Junsheng stated that long-term care insurance addresses not the “medical problem” or the “income problem,” but the “care problem.” As the system gradually takes root, this protection will become one of the important pillars of China’s social security system, marking an extension of the protection logic from “living longer” to “living with dignity.”

In the context of deepening aging, the comprehensive establishment of long-term care insurance may become an important hub connecting social security and the silver-haired economy, with its impact gradually becoming apparent over time.