Long-term care insurance coverage for all is imminent. How much do employed workers, retirees, farmers, and ride-hailing drivers need to pay each month?

Source: Financial Times

One person’s disability leads to the whole family’s imbalance. As the aging population intensifies, who will take care of the disabled elderly has become a pain point for many families. Recently, the Central Committee and the State Council jointly issued the “Opinions on Accelerating the Establishment of a Long-term Care Insurance System,” which makes it clear that by the end of 2028, this system, known as the “sixth insurance” of social security, will be basically fully covered nationwide.

Long-term care insurance provides periodic living care and medical care for insured individuals who have lost their normal activity capabilities through universal participation and fund collection, and reimburses the incurred care costs. On March 26, the National Healthcare Security Administration, the Ministry of Civil Affairs, the Ministry of Finance, and eight other departments jointly issued the “Implementation Plan for Accelerating the Establishment of a Long-term Care Insurance System,” officially unveiling the “funding account” for long-term care insurance.

How much will this benefit policy actually cost? What are the different payment standards for different groups? We have done the math for you.

According to the latest policy, the overall rate for long-term care insurance is controlled at around 0.3%. To make it clearer, we take a certain city (assuming the city’s average social wage last year was 6000 yuan/month, and the per capita disposable income for urban and rural residents was 40000 yuan/year) as an example to see how much these six groups need to pay and what benefits they can enjoy:

1. Payment details for six groups

2. Employees: The cost of a monthly cup of milk tea, which can also be deducted from the health insurance card

• Policy stipulation: The overall rate is controlled at around 0.3%, shared equally by employers and individuals, each around 0.15%. The payment base for employers is the total wage of employees, and for individuals, it is their wage income.

• Let’s do the math: Assuming employee Xiao Li’s monthly salary is 8000 yuan,

  o Xiao Li personally pays per month: 8000 yuan × 0.15% = 12 yuan;

  o Xiao Li’s company also pays 12 yuan for him each month.

• Benefit highlight: This 12 yuan does not require Xiao Li to pay extra cash, and can be directly deducted from his personal health insurance account. Even more considerate, the money in Xiao Li’s health insurance card can also be used to help pay for long-term care insurance for his spouse, parents, or even grandparents.

2. Retirees: Only a few yuan per month, directly deducted from pension or health insurance card

• Policy stipulation: The original employer no longer pays, and individuals pay at a rate of around 0.15%, based on their basic pension.

• Let’s do the math: Assuming retired employee Lao Wang’s monthly pension is 4000 yuan,

  o Lao Wang needs to pay per month: 4000 yuan × 0.15% = 6 yuan.

• Benefit highlight: With Lao Wang’s consent, this amount can be directly deducted from his personal health insurance account, and in some places, it can also be deducted from the bank card that pays the pension, without the elderly needing to run around to pay.

3. Farmers and unemployed urban residents: The government helps cover half, costing only a few dozen yuan a year

• Policy stipulation: Paid annually, shared between individuals and the government at a 1:1 ratio. In the year the long-term care insurance system is established in various regions, the rate for unemployed urban and rural residents is halved, starting from around 0.15%, gradually transitioning to around 0.3% over about 5 years; in some areas, it can also start from around 0.3%. The base is the per capita disposable income of residents in the previous year.

• Let’s do the math: Assuming the local per capita disposable income last year was 40000 yuan/year,

  o Total annual premium (calculated at 0.15%): 40000 yuan × 0.15% = 60 yuan;

  o Because the government subsidizes half, villager Zhang’s actual annual personal payment is: 30 yuan (only 2.5 yuan per month); the other 30 yuan is shared by the central and local finances.

• Benefit highlight: Considering the urban-rural disparity, rural areas can also determine the base according to the lower “per capita disposable income of rural residents,” meaning that farmers may actually pay less than 30 yuan.

4. Flexible employment individuals: Choose between two packages

• Policy stipulation: Individuals can choose to insure according to the employee rate standard or pay at the unemployed resident standard.

• Let’s do the math: Assuming ride-hailing driver Master Zhao chooses to insure according to the employee standard, he can use 60% of the local average wage (i.e., 3600 yuan/month) as the base,

  o Master Zhao pays per month: 3600 yuan × 0.3% = 10.8 yuan;

  o Master Zhao can also choose the “unemployed resident” package, paying only a few dozen yuan a year like villager Zhang.

5. Disadvantaged groups: The government “cushions,” and individuals pay nothing

• Policy stipulation: For qualified disadvantaged groups, the personal payment portion will be classified and subsidized, with full funding for extremely poor individuals, and fixed subsidies for low-income individuals and those who meet the conditions to prevent falling back into poverty. The fixed subsidy standard is determined by provincial governments based on actual conditions.

• Let’s do the math: For extremely poor individuals like lonely elderly, the government will “fully fund,” meaning they do not need to pay anything and can enjoy long-term care insurance benefits for free. Low-income individuals can also receive fixed financial assistance, greatly reducing the payment pressure.

6. Minors under 18 years old: Covered under parents’ insurance, enjoying benefits for free

• Policy stipulation: Individuals under 18 years old participate in insurance under their parents or other legal guardians, without separate funding.

• Let’s do the math: 0 yuan. As long as the parents participate in the long-term care insurance as required, if a child unfortunately becomes severely disabled before the age of 18, they are considered insured and can directly enjoy long-term care insurance benefits at the standard for unemployed urban and rural residents.

II. What benefits can be enjoyed after making payments?

1. Who can enjoy

Individuals who participate in insurance and have disabilities lasting more than 6 months, evaluated and recognized, can enjoy benefits; initially focusing on severely disabled individuals, with gradual expansion of coverage later.

2. How much can be reimbursed

There is no threshold for benefits; the reimbursement ratio is determined by the type of insurance:

• Employees/retirees: Reimbursement ratio of around 70%

• Urban and rural residents: Reimbursement ratio of around 50%

• Flexible employment individuals enjoy according to their selected insurance type

• Annual maximum payment limit: No more than 50% of the per capita disposable income of urban and rural residents in the coordinated area from the previous year

• Differentiated benefits based on disability level.

3. Service methods and payments

Support for institutional care, home care, community care, and other service provision methods. Encourage the use of home and community care services, with appropriate inclination in payment ratios. The fund pays for costs within the national unified service project directory, generally not paying cash, and will explore incorporating intelligent services and supportive assistive devices in the future.

4. Incentives and constraints

Continuous participation in insurance can appropriately increase the reimbursement ratio; if insurance is interrupted and then resumed, there is a 6-month basic waiting period, with longer waiting periods for longer interruptions, while establishing an integrity mechanism for insurance participation.

5. Policy connection

Costs for institutional bed fees, meal fees, and other non-care service fees, as well as medical expenses that should be covered by health insurance, will not be reimbursed. Participants receiving living care fees from work-related injury insurance will not receive long-term care insurance benefits.