China: Eight Departments Issued the Implementation Plan for Accelerating the Establishment of the Long-Term Care Insurance System
On March 26, the National Healthcare Security Administration, together with the Ministry of Civil Affairs, the Ministry of Finance, the Ministry of Human Resources and Social Security, and four other departments, issued the Implementation Plan for Accelerating the Establishment of the Long-Term Care Insurance System (the “Implementation Plan”).
The Implementation Plan indicates that China aims to establish, within approximately three years, a long-term care insurance system suited to its national conditions, thereby, creating an independent social insurance scheme to meet basic long-term care needs.
The Implementation Plan further clarifies that long-term care insurance will be gradually expanded to cover employees, retirees, flexible employees, and unemployed urban and rural residents, and will in principle be implemented initially at the prefectural-municipal level. Contributions for employees will be jointly made by employers and individuals, with the overall contribution rate kept at around 0.3%, while for unemployed urban and rural residents, a combination of individual contributions and government subsidies shall apply. At the initial stage, the system will focus on providing coverage for persons with severe disabilities, and benefits will be used primarily to pay for eligible long-term care services.
Key Action Points
The Implementation Plan sets out a number of key operational rules for the funding, administration and payment of long-term care insurance. For employees, long-term care insurance contributions will be collected together with basic medical insurance premiums, with the employer contribution base linked to total payroll and the employee contribution base linked to individual wage income. Retirees will contribute individually, and their former employers will not contribute on their behalf. Employee basic medical insurance personal accounts may also be used to pay long-term care insurance contributions for the insured and certain close relatives. Flexible workers may participate either under the employee contribution rules or under the rules applicable to non-employed urban and rural residents. In addition, benefits are in principle to be used to pay qualified long-term care service providers rather than being paid directly in cash. Specific implementing rules will be formulated locally under the national framework.
