The Effectiveness, Challenges, and Optimization Paths of China's Long-Term Care Insurance System

Abstract

As China undergoes deep population aging marked by rapid growth in the disabled elderly population, the steady erosion of family caregiving capacity has made long-term care a pressing social policy issue. Since 2016, China has piloted long-term care insurance (LTCI) across 49 cities, yet the transition from local pilots to a unified national system remains fraught with challenges: overdependence on medical insurance funds, urban-rural dualism, fragmented assessment standards, and weak service quality regulation. This paper traces the institutional evolution of China's LTCI, evaluates pilot outcomes across coverage, financing, service supply, and policy spillovers, and offers an in-depth analysis of the core dilemmas. We argue that the central tension lies in the compounding effect of insufficient financing independence and excessive urban-rural benefit gaps—the former threatening fiscal sustainability, the latter eroding social equity. Drawing on German, Japanese, and Korean experiences, we propose a systematic reform package centered on legislation, independent financing, and unified assessment, offering policy guidance for a nationwide LTCI system.