Ten Questions About Long-Term Care Insurance

Ask AI · How will nationwide rollout of long-term care insurance reshape the structure of the elderly care services industry?

Reporter Jiang Xin

On March 26, 2026, the State Council Information Office held a press conference to brief the public on steps to speed up the establishment of a long-term care insurance (hereinafter “LTC insurance”) system. The day before, the General Office of the CPC Central Committee and the General Office of the State Council officially released the “Opinions on Accelerating the Establishment of a Long-Term Care Insurance System,” requiring that within about 3 years, a basic LTC insurance system adapted to China’s national conditions be established. This means that the LTC insurance system, which has been piloted for 10 years, has officially entered the nationwide rollout phase.

LTC insurance is similar to China’s five social insurance programs—basic old-age insurance, basic medical insurance, unemployment insurance, work injury insurance, and maternity insurance. It also raises funds through pooling and mutual assistance to provide basic daily living support and medical care services closely related to them for people who have long-term loss of ability to care for themselves.

Economic Observer reporter, drawing on the “Opinions” and the press conference Q&A, has整理 ten questions about LTC insurance so residents can understand this new insurance product.

1. What is LTC insurance?

According to Wang Wenjun, deputy director of the National Healthcare Security Administration, LTC insurance is a new line of social insurance. By enrolling everyone to raise funds, it provides basic daily living assistance and nursing care for insured persons who have lost normal mobility and reimburses nursing expenses incurred.

2. Why roll it out?

Wang Wenjun said that establishing the LTC insurance system is a major institutional arrangement to address urgent concerns of the public and to improve the social security system.

For people with care needs, LTC insurance is a “must-have.” Through professional nursing care, it can greatly improve the quality of life for those who have lost the ability to care for themselves—so that taking a bath, getting a haircut, eating, and changing medicine are no longer “luxuries on a hospital bed,” but thoughtful care right at the bedside, within reach.

For families of care-need individuals, LTC insurance is “lightening the burden.” With institutional protection, families can reduce the dual burdens—both economic and caregiving-related. With professional nursing care, it can help ease the predicament of “one person becoming unable to care for themselves and the whole family becoming unbalanced.” With socialized and professional services, other family members can be freed from heavy caregiving duties and return to normal work and life.

For the industry, LTC insurance means “stimulus.” The establishment of this system will give rise to new business forms and new models, such as the research, development, production, and leasing of assistive devices; assessment of levels of care-need; and participation by social forces in administration and operations. These can all form new economic growth points. According to preliminary statistics, since the pilot began in 2016, LTC insurance has driven more than RMB 60 billion in social capital invested in related industries.

3. Which groups are covered?

The LTC insurance system covers everyone. Both employed personnel in work units and urban-rural residents are insured. In addition, LTC insurance no longer distinguishes between employed and unemployed people. In the same pooling area, people reimburse expenses from the same fund pool and receive benefits accordingly. LTC insurance is paid jointly along with basic medical insurance.

During the rollout of the system, the “Opinions” propose that local areas may start by covering groups such as employees of work units, retirees, and flexible employment workers, and gradually include unemployed urban and rural residents into the protection scope.

4. How do people pay contributions?

The “Opinions” clarify that the LTC insurance contribution rate is uniformly controlled at around 0.3%.

For employees of work units, the contribution rate is shared by the employing unit and the individual in proportions. The employing unit’s contribution base is the total wages of employees; the individual’s contribution base is the individual’s wages income. The employing unit and the individual pay jointly. For example, for a worker with monthly income of 10,000 yuan, the monthly contribution is 30 yuan, of which the individual pays 15 yuan and the employing unit pays 15 yuan.

For unemployed urban and rural residents, financing of LTC insurance is shared reasonably between individuals and the government. Individuals pay contributions, and the government provides subsidies in accordance with regulations. Government subsidies are jointly borne by the central and local public finance.

In the year when a local area establishes its LTC insurance system, the contribution rate for unemployed urban and rural residents is halved, starting from around 0.15%, and, over about five years, gradually transitioning to around 0.3%. In areas with conditions, it may also start from around 0.3%.

Flexible employment workers are encouraged to enroll under the contribution rate standards for employees of work units. The contribution base may be determined as a certain proportion of the social average wage of the previous year in the pooling area (not less than 60%), and individuals pay contributions in accordance with regulations. Flexible employment workers may also choose to enroll and pay contributions under the policy for unemployed urban and rural residents.

For example, if the local monthly social average wage is 6,000 yuan, a flexible employment worker can pay based on 60%, i.e., 3,600 yuan; the individual’s monthly contribution would then be 10.8 yuan.

5. Do retirees and minors need to pay?

Unlike old-age insurance, retirees also need to pay LTC insurance fees. Retiree contribution rates are the same as the individual contribution rate for employees of work units (1.5%). The contribution base is linked to the level of pension, with individuals paying contributions and the original employing unit paying nothing. For example, if a retiree’s pension is 3,000 yuan, they would need to pay 4.5 yuan per month.

For people under 18 years of age, they enroll together with their parents or guardians, and they do not need to pay contributions to enjoy benefits.

Individual accounts under basic medical insurance for employees may be used for the individual’s own LTC insurance personal contributions, as well as for close relatives (including spouse, parents, children, siblings, grandparents, and grandchildren, including grandchildren of the spouse).

6. What kinds of situations can apply for LTC insurance benefits?

Insured persons who meet the benefit eligibility conditions—those whose care-need status has continued for a long time (generally more than 6 months)—and those whose care-need has been assessed and recognized through application and approval can enjoy the corresponding nursing services and receive reimbursement. Under current assessment standards, care needs are divided into three levels: mild, moderate, and severe. In the system’s initial stage, the safeguarded groups are those with severe care needs, for whom demand is most urgent and family burdens are heaviest—mainly people who are bedridden for the long term, cannot manage daily life independently, and need others to provide care.

7. What does LTC insurance cover?

The LTC insurance fund is mainly used to pay expenses incurred for long-term nursing basic services that meet regulations. As a rule, it does not directly distribute cash to care-need persons. Focusing on the most urgent needs of care-need individuals, the state has formulated a unified catalog of LTC insurance service items, and included 36 services that are urgently needed by people with severe care needs within the scope of fund payment. These include 20 daily living care services necessary to maintain basic living, such as assistance with eating, bathing, and oral cleaning, as well as 16 basic medical nursing care items such as suction of phlegm and catheterization.

Taking “assistance with eating” as an example, to complete this service item, it requires seven steps and specific service requirements: washing hands before the meal, chopping and mixing food, setting the eating posture, checking the food temperature, preventing choking, and then after finishing eating, maintaining the body position, and recording eating circumstances, among others.

8. How much LTC insurance can people get?

LTC insurance has no deductible threshold. Regarding the reimbursement ratio, in regions where the actual contribution levels differ significantly between residents and employees, the two groups receive different treatment. To ensure the fund’s sustainability, the healthcare security administration sets an annual maximum payment limit for the fund—no more than 50% of the per capita disposable income of urban and rural residents in the previous year in the pooling area.

9. What scenarios can LTC insurance be used for?

Currently, there are mainly three types of places that provide long-term nursing services for care-need persons, and insured persons can choose independently. If choosing home nursing, designated institutions send staff to provide services at home. If choosing community nursing such as designated day-care centers, services are provided nearby, including non-full-day service. If choosing admission to designated institutions and receiving institutional nursing care, the institution provides full-day services. Since most elderly people wish to “age without leaving home,” the “Opinions” encourage the use of home nursing and community nursing, and tilt payment from the fund so that seniors can receive services and protection at home and right at their doorstep.

10. What fiscal support is there?

According to Guo Yang, director of the Social Security Department of the Ministry of Finance, the LTC insurance fund, like other social insurance funds, must be set up with separate accounts, managed separately, and used for designated purposes. It is also clearly required to include the LTC insurance fund in the budget formulation scope for social insurance funds, to scientifically compile fund revenue and expenditure budgets and to strengthen budget performance management. At present, the Ministry of Finance is working with relevant departments to study and formulate financial management rules for the LTC insurance fund and rules for managing fiscal subsidy funds. This will further strengthen fund financial budget management, clarify the specific procedures and supervision requirements for the allocation, issuance, and use of fiscal subsidy funds, and consolidate responsibilities across all levels of work, providing institutional safeguards for the safe, standardized, and efficient use of funds.

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