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Yeon Woo Lee

China has for the first time included commercial health insurance in its 2026 government work report, signalling efforts to strengthen the country’s social safety net and support the growth of innovative drugs and medical devices.
On Thursday, Chinese Premier Li Qiang said the government would “work faster to develop commercial health insurance” and promote the “high-quality development of innovative drugs and medical devices” to better meet people’s diverse needs.
Behind the unusual emphasis were an ageing population and slower government revenue growth, analysts said. Healthcare expenditure in China reached more than 9 trillion yuan (US$1.3 trillion) in 2023, growing at a compound annual rate of 9.9 per cent since 2014, according to a July 2025 report by Swiss Re Institute.
Further increases were projected, driven by greater use of medical services and rising drug and treatment costs. However, the annual surplus of the basic medical insurance fund fell for two consecutive years to 470 billion yuan in 2024, the report said.
“It will become harder for the state to carry that burden through basic public insurance alone,” said Anthony W. D. Anastasi, assistant professor of economics at the Sino-British College, University of Shanghai for Science and Technology.

Official data showed that China’s mandatory basic medical insurance covered more than 95 per cent of the population. Yet individuals, particularly those in middle-income and high-income groups, were increasingly seeking treatments and services beyond what was available under the basic coverage, according to Song Lynn, chief economist for Greater China at ING Bank.
Out-of-pocket payments accounted for 49 per cent of the costs of innovative drugs and devices in 2024, followed by national reimbursement at 44 per cent, according to the 2025 Innovative Drug and Device Payment white paper.
Late last year, Beijing rolled out its first list of innovative drugs eligible for commercial insurance coverage to improve access and affordability. The initial list covered 19 medicines, though progress has been sluggish.
Analysts were sceptical that the inclusion of commercial health insurance in the 2026 work report would lead to any immediate breakthrough.
“Insurers are still in the process of evolving their risk selection and product design, as they explore how to underwrite this segment profitably,” said Wenwen Chen, director at S&P Global Ratings.
Gary Ng, senior economist for Asia-Pacific at Natixis, said more supportive policies were likely to follow to promote such insurance products, including higher tax allowances. Still, analysts remained upbeat about the sector’s long-term outlook, particularly its potential to create new business opportunities.
Citi Research said in a report on Thursday that commercial medical insurance could account for up to 30 per cent of direct medical expenditure in the future and boost innovative drug sales by three to five times, with such sales amounting to about 300 billion yuan. “We also saw government emphasis on AI [artificial intelligence], and we think healthcare is one of the key areas to adopt AI nationwide,” the report added.
The policy could also slightly improve the propensity to consume, as “many households keep a high amount of savings on hand as a precaution against medical emergencies”, Lynn said.
Anastasi echoed the sentiment, adding that expanding the scheme could create a larger domestic market for health-related services, benefiting insurers, hospitals, pharmaceutical and biotech firms, and even elder-care providers.


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Commercial health insurance enters China’s policy agenda as an ageing population and costs strain basic coverage


Commercial health insurance enters China’s policy agenda as an ageing population and costs strain basic coverage.


China to pursue commercial health insurance to ease public strain, support drug innovation

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Commercial health insurance enters China’s policy agenda as an ageing population and costs strain basic coverage

Commercial health insurance enters China’s policy agenda as an ageing population and costs strain basic coverage