National People's Congress Deputy Zhou Yanfang: Suggests improving the independent operation mechanism of long-term care insurance

During the 2026 Two Sessions, National People’s Congress Deputy and Director of China Pacific Insurance’s Strategic Research Center (ESG Office) Zhou Yanfang will offer suggestions on reducing and exempting policy-related fees and promoting the establishment of a long-term care insurance social-business cooperation mechanism.

“Actively responding to the aging population is a major strategic deployment concerning the overall development of the country and the well-being of hundreds of millions of people,” Zhou Yanfang said. “Long-term care insurance, as an important part of the social security system, is a key institutional arrangement to solve the long-term care difficulties of disabled individuals, reduce family caregiving pressure, and improve the elderly care system.”

Zhou Yanfang introduced that China’s long-term care insurance system has adhered to a development path of pilot programs first, gradual progression, and step-by-step standardization. Since launching pilots in 2016, it has gone through three stages: initial exploration, expansion and deepening, and regulation and quality improvement. After ten years of pilots, the framework of China’s long-term care insurance system has preliminarily formed, coverage has steadily expanded, and service capacity has continuously improved. To date, long-term care insurance covers over 80 cities nationwide, nearly 300 million people, with annual fund expenditures of about 10 billion yuan, effectively alleviating the dual economic and caregiving pressures on disabled families, and the system’s effectiveness is gradually becoming evident.

The mainstream model in the current market is a risk-sharing cooperation model. The government is responsible for policy formulation, funding standards, benefit setting, fund supervision, and industry regulation, ensuring the system’s inclusiveness, fairness, and public welfare. Commercial insurance companies rely on their network deployment, professional expertise, risk control capabilities, and service systems to handle specific tasks such as organizational assessment, benefit review, expense settlement, and service supervision. This effectively compensates for the shortcomings of medical insurance departments’ operational capacity and limited grassroots coverage, while initially establishing a risk-sharing mechanism for excess payouts during the system’s early stages. However, commercial insurers face prominent issues such as sustainability of operations, inadequate implementation of the break-even profit principle, and imperfect institutional mechanisms.

In response, Zhou Yanfang recommends, by drawing on the mature experience of urban and rural residents’ critical illness insurance, to improve operational mechanisms, strengthen policy support, and promote high-quality development of policy-based long-term care insurance by commercial insurance companies.

First, reduce policy-related fees and earnestly implement the break-even profit principle. Implement preferential policies such as tax reductions, administrative and institutional fee waivers, and insurance guarantee fund reductions for institutions handling long-term care insurance, lowering their operational costs for policy-related business.

Second, refer to the special management of critical illness insurance to establish an independent operational mechanism. Borrowing from the special management model of urban and rural residents’ critical illness insurance, implement separate accounting, separate assessment, and separate supervision for long-term care insurance to ensure strict separation between policy-based and commercial insurance businesses.

Third, deepen government-social collaboration in handling operations to address the insufficiency of medical insurance operational capacity. Continuously improve the handling model involving government regulation, commercial contracting, and social participation, fully leverage the professional advantages of commercial insurance companies, undertake more operational management services, and achieve efficient separation of management and operations.

Editor: Wang Xinyu, Xu Nan

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(Edited by: Wang Xinyu)