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 benefits for people’s livelihoods. However, it has also faced ongoing challenges such as policy fragmentation across regions and difficulties in cross-regional continuity.

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 changes the terminology from “establishing” to “promoting” the LTCI system.

According to reports by Daily Economic News, in 2025, the “Opinions on Accelerating the Establishment of a Long-term Care Insurance System” were issued, proposing that within about three years, a basic system integrating urban and rural arrangements will be established, with a shared responsibility 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 built.

Against this backdrop, 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 to full system implementation?

Common Features: 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 nationwide to establish LTCI. In 2016, the Ministry of Human Resources and Social Security issued guidance on pilot programs, selecting 15 cities nationwide, with Shandong and Jilin 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, stated at a press conference that during the 14th Five-Year Plan, LTCI benefits had reached over 2 million disabled people, reducing their care costs by more than 50 billion yuan. As the pilot scope expanded, nearly 190 million people participated, with over 100 billion yuan in funds raised and more than 85 billion yuan spent.

Last July, the Central Office issued the “Opinions on Accelerating the Establishment of a Long-term Care Insurance System.” Daily Economic News found that provinces like Sichuan, Yunnan, Hebei, and Hainan have already released official implementation opinions. 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 Premiums”

While many regions adopt broad coverage in their policies, their funding and benefit standards differ.

Funding-wise, although the base rates are aligned with national standards, specific funding models vary. Hainan uses 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 workers’ income or contribution base and does not increase their payment burden. The “additional premium” model requires employed workers to pay extra, which may affect their income.

Benefit standards also vary. For example, Hainan’s LTCI fund caps monthly payments at: 1,449 yuan for home care for employees, 1,190 yuan for residents; 1,209 yuan for community care for employees, 893 yuan for residents; and 1,302 yuan for institutional care for employees, 977 yuan for residents.

Sichuan sets uniform maximum standards: for unemployed urban and rural residents, 900 yuan/month for severe level 1 disability, 1,000 yuan for level 2, and 1,100 yuan for level 3; for employed workers, 1,300 yuan for level 1, 1,400 yuan for level 2, and 1,500 yuan for level 3.

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

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

Future Development: What obstacles must be cleared for full rollout?

“During the system promotion, LTCI faces key challenges: uncertain funding mechanisms, insufficient service supply systems, and difficulties in accurate disability assessment,” said Zhu Junsheng, a postdoctoral fellow and professor of applied economics at Peking University. He explained that, first, because the coverage is broad and funding needs are large, a unified national funding standard has not yet been established. The system’s sustainability depends on multiple sources, including social insurance contributions, government subsidies, commercial insurance, and individual payments.

Second, the number of professional care institutions is limited, especially in communities and rural areas. Long-term care networks are underdeveloped, with standards and quality assessment systems still maturing, 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 benefit 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 caregiving and service companies to expand service coverage and meet market demand.

Another NPC deputy, Yan Jianguo, chief partner at Beijing Xinli Law Firm, emphasized the need to accelerate legislation, establishing a comprehensive legal framework for LTCI. He recommended drafting laws and regulations to clarify the legal status, principles, scope, and management of LTCI, positioning it as an independent social insurance alongside pension and medical insurance, to better protect the well-being of the elderly.

“Pre-establishing a multi-layered care security system, including policy support for commercial insurance participation, is also advisable,” said the industry insider. They suggested policy support for small and medium-sized domestic insurers involved in LTCI operations, along with reasonable cost allowances for commercial insurers operating on a break-even or low-profit basis.