China Insurance Regulator Calls for Broader, Higher-Quality Health Coverage

Cong Rong, vice minister of the National Financial Regulatory Administration, proposed encouraging broader and higher-quality health insurance coverage at a State Council Information Office press conference on the "Starting the 15th Five-Year Plan" theme. As an important pillar of the multi-tiered medical security system and a key financial vehicle for the Healthy China strategy, health insurance has developed rapidly over many years and built a certain scale advantage, while also facing development bottlenecks such as uneven coverage, product homogenization and insufficient coordination with basic medical insurance. The regulatory statement set the tone for the next stage of health insurance development and defined the core direction for the sector during the 15th Five-Year Plan period: at a critical juncture of slowing scale growth and deep structural adjustment, the industry needs to shift from quantitative expansion to quality improvement and broader coverage.

Over the past 10 years, health insurance has been one of the fastest-growing segments of China's insurance industry. Data from the Insurance Association of China show that health insurance has posted a compound annual growth rate of more than 20% over the past decade, with more than 11,000 medical insurance products on sale. In 2025, China's commercial health insurance premiums reached RMB 997.3 billion, accounting for 16% of total industry premiums and making it an important medical payer second only to basic medical insurance. At the policy level, the role of commercial health insurance in the multi-tiered medical security system has continued to be strengthened. In recent years, the National Financial Regulatory Administration has issued intensive guidance on promoting high-quality health insurance development, upgrading product supply, service models and regulatory mechanisms across the board. On the demand side, rising health awareness among residents has coincided with the upgrading of medical consumption, and middle- and high-income groups have shown a markedly stronger willingness to pay for drugs outside the medical insurance catalog, advanced therapies and high-quality medical resources. In 2025, commercial health insurance payments for innovative drugs and devices reached RMB 15.2 billion, up 23% year on year, of which medical insurance paid RMB 8.2 billion and critical illness insurance paid RMB 7 billion.

Distinctive health insurance products have gradually increased in the market, and insurers and insurance intermediaries have adjusted health disclosures, claims and coverage. Some products require no health disclosure at enrollment, and some have introduced zero-deductible mechanisms. Common features of these innovative products include continuously extending coverage to lower-tier groups, more finely segmented protection scenarios, coordinated development with the medical insurance system, and a gradual extension from pure indemnity to medical services and health management. Insurance coverage has gradually expanded, giving more choices to people who previously found it difficult to buy commercial health insurance because of age, pre-existing conditions or health status, while products have gradually extended from reimbursing hospitalization costs to outpatient care, specialty drugs, chronic disease management and medical services.

Alongside rapid expansion, some problems in health insurance have gradually emerged. In 2025, cumulative annual health insurance premium income of life insurers and property insurers totaled RMB 997.3 billion, up 2.05% year on year, the lowest premium growth rate in the past five years. The slowdown in health insurance growth is more a reflection of the industry moving from rapid early expansion into a stage of structural adjustment. In recent years, products such as critical illness insurance and million-yuan medical insurance successively drove rapid expansion of the health insurance market, but these mature products are now unlikely to replicate their early high-speed growth. Although demand for million-yuan medical insurance remains relatively strong, such products have relatively low average premiums per policy and limited pull on overall premium scale.

Insufficient protection in health insurance products has also become more prominent. Although more products are available to older people, those with chronic diseases and substandard-risk groups, there is still room to improve insurable liabilities, coverage amounts and renewal stability. Beyond critical illness, sustained protection for long-term medication, outpatient treatment, rehabilitation and nursing care, and innovative drug and device costs remains inadequate. The insurance industry currently faces difficulties including product homogenization, mismatch between supply and demand, data barriers and disconnected ecosystems. The more than 10,000 products on sale overlap heavily; three-quarters of the substandard-risk population face a situation in which no suitable product is available; the medical insurance and commercial insurance medical systems remain separate, and medical treatment and claims information cannot move from a black box to transparency; commercial health insurance payouts currently account for 4.5% of total health expenditure, and ecosystem coordination has not been achieved. From a traditional perspective, health insurance is merely a financial product for after-the-fact reimbursement. In an integrated ecosystem, it is a structural core tool for nationwide health governance, combining multiple functions such as data collection, behavioral incentives, resource integration and innovative payment.

The focus of expanding health insurance coverage should be on groups with relatively insufficient protection, such as older people, chronic disease patients, workers in new forms of employment and flexible employment groups, while accelerating the development of products such as long-term care insurance and disability insurance to better respond to new needs brought by population aging. Improving quality is not merely about expanding premium scale, but more importantly about raising protection quality and service capacity. In the future, health insurance should gradually transform from indemnity-type insurance to health management-type insurance, not only providing payouts after customers fall ill, but also providing disease prevention, health management and chronic disease intervention before illness, extending from treating existing diseases to preventing illness. Health insurance also needs to further strengthen coordinated development with the medical insurance system, medical institutions and pharmaceutical companies, especially in innovative drug payment, medical resource integration and long-term health management. The core logic of this transformation is risk reduction, namely lowering disease incidence and claims costs through health management services, achieving the dual functions of health protection and health promotion.

Some insurers are already shifting toward health management, linking financial products with medical and elderly care services through insurance-plus-service innovation, and promoting the transformation of the health insurance business model from traditional fee reimbursement to managed care. Future competition in health insurance will no longer focus only on product liability design, but on the ability to build a comprehensive health service ecosystem.