Shanghai Launches its Long-Term Care Insurance

In order to implement the requirements of the Ministry of Human Resources and Social Security (MOHRSS) concerning launching its Long-Term Care Insurance (LTCI), combined with Shanghai’s Thirteenth Five-year Plan, Shanghai Municipal Government formulates and issues the LTCI’s pilot scheme, which prescribes that Shanghai will start its pilot approach at Xuhui, Putuo and Jinshan districts from January, 2017. The following is a brief description of the policy.

  • LTCI’s Positioning

LTCI is positioned as a mandatory and independent insurance providing basic protection as the sixth basic social insurance tied with pension, medical, unemployment, employment injury and maternity insurance, which will effectively solve the problem of raising and use of fund. MOHRSS (the Municipal Medical Insurance Office) will be responsible for drafting and unified management of LTCI and supervision and management of the fund.

  • The Assessment of Senior Care Needs

People who are over 60 and should apply for the basic pension of urban workers as well as those who are over 60 and participate in the basic medical insurance for urban and rural residents will enjoy LTCI if they are determined as Grade 2 to Grade 6 via senior care needs assessment.

Senior care needs will be classified from Grade 1 to Grade 6 after assessment depending on the self-care ability and disease severity. Self-care ability includes the abilities of daily living (ADL), instrumental activities of daily living (IADL) and cognitive competence while disease severity mainly includes 10 kinds of diseases of which the prevalence rates are relatively high among the senior. The maximum valid period of the assessment is 2 years. Assessment of senior care needs will be the “gatekeeper” of LTCI.

  • LTCI’s Benefit

The benefit of LTCI is specifically divided into care provided by community home care, nursing homes and hospitals.

The service providers of community home care include aged care homes and the health care institutions at a basic level, e.g. nursing stations, out-patient departments (OPDs), community health centers and nursing homes. The services are provided by way of home care and community care, principally for basic life care and medical care services that are closely related to basic life.  90% of the fees will be paid by LTCI which means individuals will afford only 10%.

Care by nursing homes refers to the basic life care and medical care services which are closely related to basic life provided by the agencies for insured people who live in there. 85% of the fees are paid by LTCI and individuals need to bear the remaining 15%.

Care by hospitals refers to the medical services provided by the designated medical institutions with the senior care functions for inpatients who are the insurance participants. The specific treatment is still subject to the provisions of the current basic medical insurance system.

  • LTCI’s fund raising

The fee of LTCI are paid by employers and employees at the rate of 1% of the basis of the medical insurance and 0.1% of the basis of the medical insurance respectively. People who are insured by the basic medical insurance for urban and rural residents will have lower paying standards than those for the employee medial insurance participants. Individuals only have to pay 15% of the fees and the rest will be shared by the city and district finance.

During the pilot term, employers and individuals will not need to pay the fees, and the funds LTCI need will be transferred from the balance of medical insurance.

  • LTCI’s service providers

LTCI’s designated care institutions include nursing homes, community aged care homes, grass-root medical care services organizations, nursing beds belonging to some secondary medical institutions which have the senior care functions. At the same time, LTCI encourages development of nursing stations with medical qualification and life care stations without medical qualification. To become LTCI’s designated care institutions, the organizations need to submit applications, go through a series of evaluations and then sign service agreements with the City Medical Insurance Center.

The LTCI that Shanghai have launched this time is a basic social insurance essentially reflects the guiding ideology of “protect the basics and hold the bottom line”. Moving forward with the pilot scheme, Shanghai will constantly learn from experience and improve the LTCI system to meet the needs of long-term care services in the aging society.