China moves toward mandatory care insurance for senior citizens

After testing the programme in some regions with a series of pilot projects, China is preparing to launch a form of universal plan specifically for long-term disability care. The mutual support will be funded by a 0.3 per cent contribution rate. This will help families in a country where people over 65 are expected to make up 20 per cent of the population by 2033.

Milan (AsiaNews/Agencies) – The People's Republic of China is preparing to extend a specific form of long-term care to the entire population, an increasingly pressing issue in a country where the population is aging fast.

After a ten-year trial in several regions, the General Office of the Communist Party of China Central Committee and the General Office of the State Council recently published a document entitled "Opinions on Accelerating the Establishment of a Long-Term Care System”. The latter includes guidelines for the “sixth pillar” of the country’s social security system, which the government is set to introduce.

China's existing welfare system provides five forms of mandatory social security: pension, primary healthcare, maternity, unemployment, and work-relate injury insurance.

The problem of long-term care for dependent older people is growing exponentially. In fact, recent demographic data indicate that more than 220 million people are over the age of 65, a group expected to represent more than 20 per cent of the population by 2033.

The related social costs for this group is not covered by primary healthcare, and so end up burdening families.

Since 2016, Chinese authorities have carried out a series of pilot projects to develop potential solutions. Since then, they have been implemented in 92 different regions of the country, with a total of over 300 million people insured.

According to recently released data, 3.3 million Chinese citizens with disabilities have already benefited from these mechanisms, reducing the overall economic burden on families by over 100 billion yuan (approximately US$ 14.5 billion).

This has informed the decision to extend the "sixth social insurance" to the entire population, with a universal system that, public officials promise, will pay particular attention to equity and sustainability.

The goal is to cover everyone, without distinction between urban and rural areas or professional categories. Enrolment will be open to all workers, with a contribution equal to 0.3 per cent of their salary, split between employers and individuals, with the support of public subsidies.

The benefits will initially focus on the most severely disabled, with different reimbursement rates, while priority will be given to home and community-based care to meet the widespread desire to age in one's own family environment.

The new insurance fund will be included in a special social security account, with separate management and restricted use.

In parallel, Chinese authorities are also working on an integrated service system, capable of coordinating with health insurance and facilitating reimbursements even across regions.

The central government is convinced that this new system could also have a significant economic impact. Expanding long-term care should stimulate the development of new sectors, from the production of home care devices to disability assessment services.

Already, investments in these areas have exceeded 60 billion yuan (US$ 8.7 billion) in a rapidly growing market in China.