The central government budget has allocated the first-ever long-term care insurance subsidy fund, which has been implemented in 31 provinces.

Ask AI · How can central government pre-allocated funds ensure fairness in coverage of long-term care insurance?

Long-term care insurance has been rolled out nationwide from this year—where does the money come from? The latest funding arrangements are now available: for the first time in 2026, the central government’s budget will include subsidies for long-term care insurance, and this funding has already been allocated to regions.

Recently, the Ministry of Finance disclosed the 2026 central government budget. In the “Table Showing Regional Details of Certain Transfer Payment Projects” (referred to below as the “Table”), it shows the budget amounts for subsidies for basic medical insurance and long-term care insurance for urban and rural residents in each province this year.

In the “Explanatory Note on Subsidy Funds for Basic Medical Insurance and Long-Term Care Insurance for Urban and Rural Residents” (referred to below as the “Explanatory Note”), the Ministry of Finance states that, according to the work部署 by the CPC Central Committee and the State Council to accelerate the establishment of a long-term care insurance system, starting in 2026, the subsidy funds for long-term care insurance for urban and rural residents will be included within the scope of subsidy funds for basic medical insurance for urban and rural residents, and the subsidy for basic medical insurance for urban and rural residents will be renamed as subsidy funds for basic medical insurance and long-term care insurance for urban and rural residents.

The “Budget Table of 2026 Central-to-Local Transfer Payments” shows that the budget amount for subsidies for basic medical insurance and long-term care insurance for urban and rural residents is 424.88B yuan, an increase of 18.18B yuan over the 2025 executed amount, up 4.5%. This is mainly arranged based on calculations using the fiscal subsidy standards for basic medical insurance for urban and rural residents and the number of insured persons, among other factors, and by increasing the allocation of subsidy funds for long-term care insurance (long-term care insurance subsidies are not separately listed for a specific amount).

The Opinion of the General Office of the CPC Central Committee and the General Office of the State Council on Accelerating the Establishment of a Long-Term Care Insurance System requires establishing and improving diversified funding channels such as those from units, individuals, the government, and society.

The “Implementation Plan for Accelerating the Establishment of a Long-Term Care Insurance System,” issued by eight departments including the National Healthcare Security Administration, further clarifies that for unemployed urban and rural residents (farmers and unemployed urban residents), the long-term care insurance will collect funds annually and pay them together with basic medical insurance premiums for urban and rural residents. The funding consists of individual payments and government subsidies, with a ratio of about 1:1. Government subsidies are jointly borne by the central government and local governments.

At a press conference held by the State Council Information Office, Guo Yang, Director of the Social Security Department of the Ministry of Finance, said that for urban and rural residents who are insured under long-term care insurance, the government provides subsidies in accordance with regulations. On this basis, the government also provides categorized subsidies for difficult groups such as people in extreme poverty and those eligible for the minimum living allowance. These subsidy funds are jointly borne by the central and local governments, and corresponding arrangements have already been made in the 2026 central-to-local transfer payment budget.

In its “Explanatory Note,” the Ministry of Finance states that among the total budget of 424.88B yuan for subsidy funds for basic medical insurance and long-term care insurance for urban and rural residents, 419.61B yuan has already been allocated to regions, and 5.2666 billion yuan has not yet been allocated to regions. The main reason is that the subsidy funds for basic medical insurance and long-term care insurance for urban and rural residents are settled based on the number of insured persons and subsidy standards that have been reviewed and verified. Since the relevant data have not yet been reported and approved, it is currently impossible to fully allocate the funds to all regions.

Guo Yang said that taking into account that insured participation in long-term care insurance in various places is a process that will gradually be rolled out, the central government’s subsidies to local governments this year will first be implemented through pre-allocation based on the number of insured persons expected in each locality. Then, in the next year, settlement will be made based on the actual number of insured persons, to ensure that subsidy funds can be fully paid out. In the future, as the number of insured persons increases, the intensity of fiscal subsidies will continue to be increased.

The 2026 performance targets determined in the “Explanatory Note” are: the enrollment rate for basic medical insurance remains stable at around 95%; the reimbursement ratio for inpatient expenses within the policy scope of basic medical insurance for urban and rural residents remains stable at around 70%; the number of months that can be paid using accumulated fund balances is not less than 6 months; and satisfaction among insured individuals is not lower than 85%. The coverage scope of long-term care insurance will be steadily expanded, and satisfaction among insured individuals is not lower than 85%.

(This article comes from Caixin Finance)