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1. Introduction
The Chinese population is ageing and will continue to age dramatically. The United Nations projects that the percentage of Chinese people aged 60 years or above was 12.4% (168 million people) in 2010 and will increase to 28% (402 million) by 2040 [1]. The pace of population aging in China is much faster than that in other developed and developing countries [2]. Together with this demographic change, China is simultaneously witnessing great socioeconomic transition. Accelerated by the one-child policy, the so-called 4-2-1 family structure (i.e., a family constituted by four grandparents, two parents and one child) has become the main stream family structure in urban China [3]. This socioeconomic transition weakens the traditional familial duties of caring and supporting the elderly [4]. As a result, a huge number of elderly Chinese are now choosing to live alone [5]. Given that long-term care is quite costly in developed countries [6], the above demographic and socioeconomic shift makes the financing of long-term care a significant concern for policymakers in China.
Long-term care insurance (LTCI) is acknowledged as the most desirable policy choice among the existing public financing models of long-term care in China [7], which is also highly recommended for a middle-income country familiar with the public insurance system for the financing of long-term care [8]. In June 2016, the Ministry of Human Resources and Social Security in China issued a document “Guidance on Pilot Cities to Launch Long-Term Care Insurance”, which signified the official initiation of LTCI in China. A total of 15 cities were designated as pilot cities. Based on the experience in the pilot cities, China aims to formally design the policy framework of LTCI by 2020. The policy recommendations made for pilot cities to design LTCI’s target participants, eligible criteria, financing mechanism, and benefit package include the following focal points: (1) The participants of LTCI are in principle those covered by Urban Employees Basic Medical Insurance (UEBMI), a public health insurance covering the employed urban population; (2) It is the severely disabled to whom LTCI mainly provides financial protection; (3) In the pilot stage, it suggested that LTCI raise funds by optimizing the structure of UEBMI funds, transferring UEBMI pooled funds, and adjusting the contribution rate of UEBMI and so on;...