Long-term Care Insurance "Comprehensive System Building" Launches: Comparative Analysis of Plans from Yunnan, Sichuan, Hainan, and Hebei

Nearly ten years of pilot programs, covering 49 cities with a total fund expenditure of over 80 billion yuan—Long-term Care Insurance (LTCI) has delivered significant social benefits but has also faced ongoing challenges such as policy fragmentation and cross-regional discontinuities.

The good news is that during the 14th Five-Year Plan period, the LTCI system will shift from pilot projects to full implementation. The 2026 government work report also states that the “Long-term Care Insurance System” will move from “establishment” to “promotion.”

According to reports, in 2025, the “Opinions on Accelerating the Establishment of a Long-term Care Insurance System” were issued, proposing to establish a basic system covering urban and rural areas within about three years, with a responsible, shared funding mechanism, fair and moderate benefit guarantees, and a scientifically regulated management system. The LTCI system suited to China’s national conditions will be fundamentally established.

In this context, the expansion of LTCI coverage is accelerating, with provinces like Yunnan, Hebei, Hainan, and Sichuan releasing implementation plans. How do these regions compare in terms of coverage, funding, and benefits? What obstacles remain before full system integration?

System Commonalities: All four regions include flexible employment groups

LTCI is a social insurance system that provides basic living care and medical services for people who are unable to care for themselves due to aging, illness, or disability.

In 2012, Qingdao issued the “Opinions on Establishing a Long-term Medical Care Insurance System (Trial),” becoming the first city in China to establish such a system. In 2016, the Ministry of Human Resources and Social Security issued guidance on pilot programs for LTCI in 15 cities nationwide, with Shandong and Jilin designated as key provinces. By 2020, the National Healthcare Security Administration and the Ministry of Finance expanded the pilot to 49 cities.

In July 2025, Li Tao, Deputy Director of the National Healthcare Security Administration, announced at a State Council press conference that during the 14th Five-Year Plan, LTCI had benefited over 2 million disabled individuals, reducing their care costs by more than 50 billion yuan. As pilot coverage expanded, nearly 190 million people were insured, with over 100 billion yuan in funds raised and more than 85 billion yuan spent.

Last July, the Central General Office issued the “Opinions on Accelerating the Establishment of a Long-term Care Insurance System.” Reports show that provinces like Sichuan, Yunnan, Hebei, and Hainan have already released implementation plans. Coverage includes employees, retirees, flexible workers, and urban and rural residents without employment; benefit payment ratios generally follow the pattern of about 70% for employees and 50% for non-employed urban and rural residents.

This effectively addresses previous concerns about limited coverage and rural residents being excluded, ensuring fairness in the system.

Differences in Models: “Structural Transfer” vs. “Additional Premium”

Although all regions aim for broad coverage, their funding and benefit standards differ.

Funding-wise, while baseline rates are set according to national guidelines, specific models vary. Hainan adopts a relatively simple “structural transfer” approach, reducing basic medical insurance rates by 0.15% to fund LTCI. Yunnan, Sichuan, and Hebei, on the other hand, implement an “additional premium” model, adding an extra 0.3% on top of existing medical insurance contributions.

These differences directly impact workers’ experiences. The “structural transfer” model has little effect on current income or contribution base and does not increase payment pressure. The “additional premium” model requires employed workers to pay extra, which may affect their income.

Benefit standards also vary. In Hainan, the maximum monthly payment per person is set as follows: for home care, 1,449 yuan for employees and 1,190 yuan for residents; for community care, 1,209 yuan and 893 yuan; for institutional care, 1,302 yuan and 977 yuan. Sichuan sets uniform maximum standards: for unemployed urban and rural residents, 900 yuan for severe level 1 disability, 1,000 yuan for level 2, and 1,100 yuan for level 3; for employees, 1,300 yuan, 1,400 yuan, and 1,500 yuan respectively.

Hainan also mentions “off-site settlement,” while Hebei talks about “gradually resolving issues for out-of-region insured persons.”

“From the experience of pilot regions, LTCI generally faces issues such as insufficient publicity, inconsistent assessment standards, and limited service capacity,” industry insiders told Daily Economic News. Poor publicity weakens residents’ willingness to pay; inconsistent assessments can lead to overestimation of disability levels; many service providers lack profitability, limiting their role in elder care.

Future Development: What Barriers Must Be Cleared for Full Rollout?

“During the system’s promotion, LTCI faces key obstacles: uncertain funding mechanisms, insufficient service supply, and challenges in disability assessment and benefit accuracy,” said Zhu Junsheng, a postdoctoral fellow and professor of applied economics at Peking University. He explained that, first, the broad coverage and large funding needs lack a unified national standard. The system’s sustainability depends on multiple sources, including social insurance contributions, government subsidies, commercial insurance, and personal payments.

Second, the number of professional care institutions is limited, especially in communities and rural areas. The long-term care network is underdeveloped, with standards and quality assessment systems not yet mature, leading to regional disparities and mismatched supply and demand.

Third, the core of LTCI is accurate assessment of disability levels. Currently, standards are inconsistent, making nationwide standardization difficult. Assessment results directly influence payment levels and care grades; lack of transparency could undermine fairness and operational feasibility.

During the two sessions, many delegates and members of the National People’s Congress proposed suggestions for implementing LTCI.

Deputy Zhang Changli suggested involving more qualified domestic care and service companies to expand coverage and meet market demand. Yan Jianguo, partner at Beijing Xinli Law Firm, emphasized accelerating legislation to establish a comprehensive legal framework for LTCI, clarifying its legal status, principles, scope, and management system, positioning LTCI as an independent social insurance alongside pension and medical insurance to protect seniors’ well-being.

He also recommended early development of a multi-layered care guarantee system, including policies supporting commercial insurance participation in LTCI. Industry insiders suggest providing policy support for small and medium-sized domestic insurers involved in LTCI projects and offering reasonable costs for their participation, balancing profitability with social responsibility.