Wǔ Boyao, an 86-year-old Parkinson’s disease patient, recently experienced firsthand the complexities of China’s emerging long-term care insurance (LTCI) system. After moving from Shanghai to a suburb governed by Suzhou, he lost access to nearly free home care services previously available under Shanghai’s pilot LTCI scheme. This highlights the challenges posed by fragmented regional administration amid China’s broader effort to provide social insurance for its rapidly aging population.
China’s LTCI program, launched with pilot projects in over 90 cities since 2013, aims to provide basic daily living support for elderly individuals who are functionally disabled or have cognitive impairments. It is a government-led initiative jointly funded by individuals, employers, and fiscal subsidies, drawing on models used in countries like Germany, Japan, and South Korea. In March 2024, the Chinese central government announced plans to expand LTCI nationwide, targeting full coverage by 2028.
Despite covering an estimated 308 million people last year, only 1.93 million had accessed benefits, underscoring the system’s early development stage. According to a recent report, China had around 36 million elderly individuals with disabilities and 17 million with dementia at the end of 2023. The country is rapidly approaching "super-aged" status, with over 223 million people aged 65 or older, accounting for approximately 16% of the population.
Under the upcoming system, workers and employers will split LTCI contributions, while unemployed urban and rural residents will share payments with government subsidies. However, affordability remains a concern, particularly for rural residents, where per capita incomes are lower and care services scarcer. Experts warn that although cities like Shanghai have relatively ample nursing homes and care facilities, central and western regions face significant shortages.
Wu Bei, a public health professor at NYU Shanghai, noted that uneven regional development and economic disparities pose substantial challenges. She emphasized the difficulty of providing care to “empty-nest” seniors—elderly individuals living alone after their adult children have moved away—especially in rural areas. The shortage of professional caregivers, a low-paid and demanding occupation with high turnover rates, further complicates the situation.
The government has recently incorporated LTCI provisions into the Healthcare Security Law, effective early 2025, mandating the establishment and improvement of the LTCI system. Potential benefits include job creation and economic stimulation amid slowing growth, but the long-term financial sustainability of the fund remains a critical issue. Comparable systems in Germany and Japan face similar financial pressures, often prompting legislative adjustments to balance costs and benefits.
Cultural factors also influence the program’s adoption. Sociologists point out that mutual aid traditions and a preference for saving rather than purchasing insurance pose obstacles to widespread enrollment. The relatively low contribution rates set by the government—approximately 15 yuan monthly from workers and matching amounts from employers—may still be challenging for many, especially in less affluent areas.
Some stakeholders advocate for differentiated approaches combining public funding for basic care with private insurance options for wealthier families, as seen in the United States, where public programs cover the majority of long-term care costs. Providing more support to family caregivers, including adult day care centers, is also seen as vital. Family members often bear much of the caregiving burden, as illustrated by Jenny Wu, whose mother cares for her disabled father but has had to reduce her working hours to fill gaps in formal care.
Currently, China has just over 13,000 designated long-term care institutions and fewer than 403,000 care workers nationwide. While the government push for LTCI may enhance employment opportunities, experts caution that many care jobs remain low quality and unstable, with high attrition rates due to the physically and emotionally demanding nature of the work.
Despite these challenges, some experts view the country’s demographic shift as a strategic opportunity to professionalize elder care, create jobs, and stimulate economic development. Aging, while presenting significant hurdles, could serve as a catalyst for long-term reforms in social insurance and healthcare infrastructure.