Source: China Times
As China enters a stage of deep aging, elder care is no longer just a family issue but a strategic priority for national development. The "15th Five-Year Plan" calls for proactively addressing population aging and establishing policies that foster the coordinated development of public elder care services and the industry sector.
On 10 13, the "Health and Pension Insurance Protection Index (2025)", jointly released by Xiaoyusan Insurance Broker, Shouhui Insurance Agency, and the School of Finance at Nankai University, reveals that China's commercial health insurance premium scale is approaching 1 trillion yuan. Long-term care insurance systems are shifting from localized pilots to nationwide rollout, with coverage for specialized cancer drugs and disability care emerging as new frontiers in both policy and market focus. However, contrasting sharply with the robust growth of health insurance, the pension insurance protection index has improved only modestly and remains significantly low.
Zhu Minglai, Director of the Institute for Pension and Health Security at the School of Finance, Nankai University, told China Times that the report calculated a pension security composite index of 2025 in 0.57 year and a health security index rising to 0.64, indicating that pension remains a weak area. He also noted that the burden of tumor diseases continues to intensify, and high-value innovative drugs cannot rely solely on basic medical insurance; commercial insurance innovative drug lists and "three exclusions" policies have opened payment channels for commercial health insurance. He emphasized that moving forward, we must break down barriers between insurance types, strengthen policy guidance, develop inclusive health and pension products, promote integration between basic medical insurance and commercial insurance, and enhance public awareness of long-term protection.
Health insurance nears 1 trillion yuan as structural divergence intensifies
The report shows that commercial health insurance premiums reached 9973 billion yuan in 2025, with a compound annual growth rate of over 15% in the past decade, standing just one step away from the trillion-yuan milestone. Total payouts for innovative drugs and medical devices by commercial health insurance amounted to approximately 147 billion yuan. A tiered supply system comprising city-specific普惠-type medical insurance, long-term care insurance, and high-end medical insurance is gradually taking shape, creating a differentiated and complementary relationship with basic medical insurance.
However, structural fragmentation within the market is becoming increasingly pronounced. Survey data shows that commercial medical insurance and critical illness insurance coverage rates are 61.23% and 57.32%, respectively; Huimin Bao stands at 33.43%; while disability income loss insurance and long-term care insurance lag significantly at just 10.85% and 7.65%. Consumers remain relatively well-covered for visible health risks like hospitalization and critical illnesses, but substantial gaps persist in protection against long-term risks such as disability, long-term care, and income interruption.
Tian Wei, Deputy Secretary-General of the Tianjin Insurance Association, noted that public needs are undergoing profound shifts. "In 2025, commercial health insurance premiums totaled approximately 9973 billion yuan, while participation in the personal pension system has exceeded 1.5 billion people, with cumulative contributions surpassing 1000 billion yuan. What people now seek is not merely whether they have insurance, but whether it offers more comprehensive coverage and adequately supports long-term care. As demands evolve, supply must innovate."
Our reporters noted that the new section on tumor disease burden and special drug coverage in this year's report reveals structural contradictions in innovative drug payment. In 2024, China's market size for innovative drugs and devices was approximately 1620 billion yuan, with medical insurance funds covering about 710 billion yuan (accounting for 44%); out-of-pocket payments by individuals totaled around 786 billion yuan (a high of 49%); commercial health insurance spending was only 124 billion yuan (accounting for 7.7%). For innovative drugs with annual treatment costs ranging from hundreds of thousands to millions of yuan, an out-of-pocket ratio nearing 50% far exceeds what most patients can afford.
Zhu Minglai believes there is a structural conflict between the basic health insurance's role of covering essential needs and the payment for high-value innovative drugs. Using CAR-T therapy as an example: "8 products are already approved in China, with prices typically ranging from 99.9 to 129 million yuan. The total per capita contribution to urban and rural resident basic medical insurance in 2025 was 1100 yuan, meaning the cost of a single CAR-T treatment exceeds the annual premiums of thousands of insured individuals. There is a gap that cannot be bridged between the payment capacity of the basic health insurance fund under its 'essential coverage' mandate and the cost of these 'sky-high priced' drugs."
A breakthrough is emerging. In 2025 year, 12 month, the National Healthcare Security Administration released its first "Commercial Health Insurance Innovative Drug Directory," covering 19 drugs from 18 pharmaceutical companies, including 14 anticancer agents and all 5 CAR-T products. Zhu Minglai stated: "This directory marks a shift in payment pathways for high-value innovative drugs from a single public insurance channel to a dual-track model combining 'basic medical insurance' and 'commercial health insurance.' As the public insurance directory continues to expand and access for innovative drugs accelerates, 'approval leads to coverage' has become the norm. For drugs that do not yet meet the price reduction threshold for inclusion in basic insurance, they can first enter the commercial insurance agreement price directory, gradually aligning with basic insurance through commercial coverage."
Institutional Gaps and Commercial Insurance Opportunities in Disability Risk
Currently, the number of disabled and cognitively impaired elderly people in China exceeds 4500 million. In 2026, the General Office of the CPC Central Committee and the General Office of the State Council issued the "Opinions on Accelerating the Establishment of a Long-Term Care Insurance System," shifting long-term care insurance from local pilot programs to nationwide rollout, with a target of achieving near-universal coverage by the end of 2028.
However, the basic long-term care insurance's positioning as "covering essential needs and providing a safety net" limits its scope. A case study from a prefecture-level city in Jiangsu Province on home-based care for severely disabled elderly people shows that hiring 24 hours of live-in caregivers annually costs families about 7.2 million yuan, while the long-term care insurance fund covers only 1.2 to 1.8 million yuan per year. Families still bear most of the care costs. The funding gap is even more significant when choosing professional nursing institutions.
Zhu Minglai stated, "Long-term care risks are characterized by long coverage periods, multi-layered needs, and high service costs. A single basic insurance system cannot fully meet residents' diverse care needs. Basic long-term care insurance addresses whether people have access to essential care coverage, while commercial long-term care insurance should cover higher benefit limits, broader scenarios, and personalized needs."
The report also highlights a significant shortage in the supply of commercial long-term care insurance. As of the end of 2025, life insurers offered a total of 4607 health insurance products, with only 152 dedicated to commercial long-term care coverage—just 3.3% of the total. Premiums from these products have consistently accounted for less than 2% of total health insurance premiums. The product mix is heavily skewed: over 90% of offerings are lifetime savings-oriented plans, while affordable, pure-protection term and inclusive care insurance options remain severely limited.
Zhu Ming called for commercial nursing insurance to move beyond homogeneous competition, establishing a core positioning of "differentiated complementarity, quality and efficiency improvement, and service empowerment," while optimizing across product, service, data, and policy dimensions.
The report shows that the pension insurance coverage index rose from 0.4706 in 2024 to 0.5048 in 2025, an increase of 0.0342. This improvement exceeds the 0.0187 gain seen in the health insurance coverage index. The basic coverage level increased from 0.7438 to 0.8057, while the supplementary coverage level rose from 0.2293 to 0.3756, indicating continued consolidation of the first pillar and progress in the second and third pillars.
However, the report also warns that pension sustainability has declined from 0.4108 to 0.4046, and funding adequacy has dropped from 0.5249 to 0.4763. Expanding coverage has not yet translated into long-term reserve capacity. Zhu Minglai told this reporter: "Our survey samples still show overreliance on basic pensions, insufficient supplementary coverage, weak long-term savings, and significant differences in groups' ability to continue paying premiums. The wage replacement rate of basic pensions can remain around 50%, which is sufficient for active and healthy seniors. However, for those with suboptimal health or disabilities (including cognitive impairment), the ultimate financial burden of aging lies more heavily on medical care and support services."
"Our protection efforts should shift toward this direction, rather than simply providing a certain pension amount. The key is to offer corresponding services that you can access at reasonable prices." said Zhu Minglai.
To address deep-seated needs in health and elderly care, insurers are evolving from mere payers into comprehensive service providers. Liuman Life General Manager Liao Minghong stated, "In the past, buying insurance meant the relationship ended after a claim was filed and settled. Now, this is changing. Health management involves frequent customer interactions, along with renewal retention and reputation building. We are gradually integrating products and services so customers receive both insurance and care when they purchase." Liuman Life proposes a "three-stage" elderly care model covering active aging, home-based care, and institutional care. Leveraging parent company C&D Group's hospital, hotel, and senior living resources, as well as Taiwan Life's experience in establishing retirement villages on university campuses, the company is building a holistic elderly care ecosystem.
Pan Gaofeng, Deputy General Manager of China Post Life Insurance, shared insights on payment synergy: "We have already established a data collaboration with the National Healthcare Security Administration. With authorization from the administration, claims can be processed in 8 seconds without requiring any documentation. Insurance is not just a standalone product but a comprehensive family solution. From the insurer's service perspective, we call it 'China Post Premium Selection.' It is essential to integrate high-quality service resources, particularly caregiving services. The standards, processes, and post-service evaluation are critical."
Wang Xiuwen, General Manager of Beijing Life Insurance, emphasized from the perspective of product innovation that critical illness insurance should incorporate dividend-based designs to enhance customer satisfaction and advocate for a unified industry-wide disease definition library. This initiative aims to reduce claim disputes while improving pricing accuracy and claims precision. Additionally, there is an urgent need to accelerate the development of specialized products for the elderly and children, with a focus on deepening pediatric critical illness coverage and exploring solutions for middle-aged and senior adults. In collaboration with Xiaoyusan, Beijing Life's "Big Yellow Bee" pediatric critical illness insurance has undergone 12 upgrades, covered over 26 individuals, provided basic sum assured amounts reaching 50 yuan, and achieved an average claim payout of 30 yuan—surpassing market averages.
