Follow Long-term Care Insurance | From Pilot to Full Implementation, Long-term Care Insurance Activates a Trillion-Yuan Silver Market

Ask AI · How Can Long-Term Care Insurance Crack the “Payment Difficulty” in Elderly Care?

The “Opinions on Accelerating the Establishment of a Long-Term Care Insurance System” (hereinafter referred to as the “Opinions”), was officially released recently. Hailed as the “sixth insurance” of social security, long-term care insurance (i.e., long-term care insurance) has ended its ten-year pilot and has officially entered a new stage of comprehensive implementation. This institutional change not only brings a bright horizon for families caring for people who are unable to care for themselves, but is also widely regarded in the industry as a key lever for unlocking the silver-haired economy.

As China’s population continues to age, the number of elderly people who are unable to care for themselves or who suffer from dementia is also growing steadily. Data from the National Healthcare Security Administration shows that, as of the end of 2025, China’s population aged 60 and above had reached 323 million, accounting for 23% of the total population; of these, there are about 45 million elderly people who are unable to care for themselves or who are suffering from dementia. A demographic study from Peking University shows that by 2030, the number of elderly people who are unable to care for themselves in China will exceed 77 million. Those who are unable to care for themselves will spend 7.44 years in that care-need period.

Chen Zecan, Chairman of Huayang Smart Elderly Care Group, said that the release of the “Opinions” is of “milestone” significance in China’s response to population aging. The official rollout of the “sixth insurance” means that the care problems faced by elderly people who are unable to care for themselves have, from being a responsibility of families and a safety net provided by the civil affairs system, been formally elevated to a national social security system.

“The ‘Opinions’ address the biggest pain point in the silver-haired economy—people’s willingness to pay versus their ability to pay.” Chen Zecan said that in the past, elderly care services were difficult to scale up. The core reasons were low willingness to pay among C-end users and difficulty in making profits on the B-end. As the “sixth insurance,” long-term care insurance, through government credit backing and a pooled fund model, greatly releases the strong payment capacity of families of those who need long-term care. Long-term care insurance will truly activate a commercial closed-loop in the elderly care nursing industry.

However, while institutional dividends are being unleashed, shortcomings on the supply side are becoming increasingly prominent. Chen Zecan believes that the coverage of basic elderly care services is expanding rapidly. After several rounds of pilots, China has seen a significant increase in supply in areas such as nursing beds and basic life assistance. The “whether there is” problem has been preliminarily addressed. But overall, there still exists a “structural mismatch” in supply.

He pointed out that the current market supply shows a structurally imbalanced pattern of “weakness at both ends.” On the one hand, professional medical-level nursing resources for people with moderate to severe care needs remain scarce. On the other hand, the supply of preventive interventions and rehabilitative services for people with mild care needs and elderly people living alone at advanced age is clearly insufficient. With a large amount of resources over-concentrated in intermediate links, an effective closed-loop for precise matching between the payment side of long-term care insurance and the service supply side has not yet formed.

At the same time, Chen Zecan also noted that professional care talent is facing a structural predicament of both “quantity and quality shortages.” Nursing aides have low social status, weak professional identity, and unclear promotion pathways, leading to extremely high staff turnover. Many institutions are stuck in a vicious cycle of “can’t recruit, can’t retain, and insufficient professionalism.”

“This also happens to provide a broad stage for market-oriented forces.” Chen Zecan said. Long-term care insurance is positioned as “covering the basics,” but “the basics” are the foundation—“value-added” is the direction.

Regarding the market opportunities brought by long-term care insurance, Wang Wenjun, vice director of the National Healthcare Security Administration, also said recently that for the industry, long-term care insurance means “driving demand.” It can be said that the establishment of this system has spawned new business formats and new models—such as research, production and leasing of assistive devices, assessments of long-term care tiers, and other roles for social forces in administration and operations. These can all form new growth points. According to preliminary statistics, since the start of the pilot in 2016, long-term care insurance has driven investment of social capital into related industries of over 60 billion yuan.

According to data from the National Healthcare Security Administration, during the pilot period, the long-term care fund cumulatively purchased more than 100 billion yuan worth of nursing services. Designated service institutions reached 12,000, which is 10 times the number at the beginning of the pilot. It is expected that once the system is fully rolled out, there will be funds on the order of one trillion yuan entering the market every year. This will effectively reduce uncertainties in the operation of the long-term care market and enhance the confidence of operating entities in continuously investing capital.

For social capital, the real business opportunity may not lie in how the above funds are allocated, but rather in how much room will be released for needs that go beyond the “basic package” once the most fundamental nursing is covered as a safety net by insurance.

Liang Jialin, a Standing Member of the Public Hospitals Medical Insurance Administration Specialized Committee of the China Medical Insurance Research Association, expects that after long-term care insurance is expanded, it will release a service coverage area of more than three times. Meanwhile, beyond basic life assistance and general medical nursing, if higher-level health services can be provided, more improvement-oriented demand will be stimulated. For example, provide home-based psychological therapy for ostomy patients who have lost social dignity; provide rehabilitation training for Alzheimer’s patients to delay cognitive decline; provide anti-infection and home beauty care for patients in the rehabilitation period after burns; install dynamic vital sign monitoring devices for bedridden patients (such as blood oxygen monitoring) and connect them with family members or medical institutions in real time; in addition, scarcity-type resources also represent a direction for services. For example, open a “green channel” for referrals of patients whose conditions suddenly change to top hospitals such as national medical centers.

Chen Zecan also believes that in terms of market demand, as the “post-1960s” generation comes into view, they generally have stronger consumption capability, more open consumption concepts, and stronger awareness of quality. They are not satisfied with “someone is managing it,” and instead pursue “managing it well,” “with dignity,” and “personalized” services. Therefore, high-end care and personalized services are not “niche needs,” but rather an upgraded version of “rigid demand.”

“Among European countries or in our Hong Kong region, in places where these populations have reached deep aging, a long-term care insurance industry chain has already been extended.” Liang Jialin said. With basic long-term care insurance layered with commercial long-term care insurance, innovative industries such as robot care (e.g., bathing assistance, feeding, companionship, and assisted exercise), digital therapies (e.g., mental health and psychological care, cognitive impairment, prevention, treatment, and rehabilitation of bone and muscle diseases), big data services (e.g., management of designated institutions and full-hologram supervision of funds), as well as mature industries such as elderly care services, rehabilitation assistive devices, and long-term care nurse training, are expected to bring market space on the scale of hundreds of billions. (Reporter: Liang Qian)

Source: Economic Information Daily