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 policy-related costs 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 taken shape, 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 economic and caregiving pressures on families with disabled members, and the system’s effectiveness is gradually emerging.

The mainstream market model currently 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 challenges such as sustainability of operations, implementation of the break-even profit principle, and imperfect institutional mechanisms.

In response, Zhou Yanfang recommends, 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 costs and effectively implement the break-even profit principle. Provide tax reductions, administrative and institutional fee waivers, and insurance guarantee fund exemptions for institutions handling long-term care insurance to lower operational costs.

Second, refer to the special management of critical illness insurance to establish an independent operational mechanism. Borrowing from the 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 operations.

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

Editor: Wang Xinyu, Xu Nan