This year's Government Work Report proposed to "accelerate the development of commercial health insurance, promote the high-quality development of innovative drugs and medical devices, and better meet the diverse medical and medication needs of the people." This marks the first time the Government Work Report has specifically highlighted commercial health insurance. What is the background behind including "accelerating the development of commercial health insurance" in the report? How has commercial health insurance developed in recent years? Where does its growth potential and primary direction lie? Industry insiders were interviewed on these topics.
The structure of the trillion-yuan health insurance market is undergoing transformation. Commercial health insurance has been held in high expectation for many years. Regulators had previously set specific targets for it. In January 2020, the former China Banking and Insurance Regulatory Commission, jointly with multiple departments, issued the "Opinions on Promoting the Development of Commercial Insurance in the Social Service Sector," proposing to "strive for the market size of commercial health insurance to exceed 2 trillion yuan by 2025." In 2020 itself, health insurance premiums reached 817.3 billion yuan. However, data from the subsequent five years show that reality fell short of this target. By 2025, the combined premium income from health insurance operations of life insurance companies and property insurance companies was 997.3 billion yuan, only half of the "2 trillion yuan target."
Nevertheless, structural changes occurred as commercial health insurance approached the trillion-yuan mark. From a sub-sector perspective, life insurance companies were previously the main operators of health insurance business. However, driven by government business and various internet-based operations, property insurance companies contributed the majority of the growth in health insurance. During the "14th Five-Year Plan" period, health insurance premiums from life insurance companies grew from 705.9 billion yuan to 769.9 billion yuan, an increase of only 9%. In contrast, health insurance premiums from property insurance companies grew from 111.4 billion yuan to 227.4 billion yuan, an increase of 104%.
In terms of insurance types, among the four categories of health insurance—disease insurance, medical insurance, long-term care insurance, and income loss insurance due to disability—the primary driver of growth in recent years has shifted from critical illness insurance to medical insurance. In recent years, the growth rate of new critical illness insurance policies has remained in the single-digit range, showing weak growth coupled with worsening disease incidence rates, leading to a "transition period" for critical illness insurance. In contrast, the medical insurance market has been quite active. In 2016, million-yuan medical insurance became the first popular category, with policyholders quickly exceeding 100 million. Around 2018, specific drug insurance was launched. In 2020, inclusive commercial health insurance (Huimin Bao) sparked a new wave. Over the past two years, mid-range medical insurance has formed another market trend.
The shift in focus from critical illness insurance to medical insurance has its logic. The "2024 Research Report on Health and Pension Insurance Security Index" analyzed several reasons: Firstly, critical illness insurance has stronger life insurance attributes and weaker synergy with the pharmaceutical industry compared to medical insurance. Its "lump-sum payment" nature is not necessarily linked to the growth of drug and service consumption expenditures in the pharmaceutical industry. Secondly, under policy guidance, the broader environment emphasizes innovative drugs and devices, empowered by healthcare data and settlement systems, opening more potential and smoother growth pathways for medical insurance and inclusive commercial insurance, continuously challenging the former dominance of critical illness insurance. Thirdly, the sales force in the commercial insurance industry has bottomed out, and downward adjustments in predetermined interest rates have led to increased premiums for long-term health insurance, suggesting that the high-growth model for critical illness insurance may be a thing of the past.
The industry is moving from operating in isolation to integrating into the coordinated "Three Medicals" system (healthcare, medical insurance, and medicine). A senior executive from a large insurance company stated that the development of health insurance over the past 20 years has gone through stages of specialized operation, elevated positioning, and new requirements for high-quality development. The 2019 revised "Measures for the Administration of Health Insurance" was introduced, stating for the first time that "health insurance is an important part of the national multi-level healthcare security system." In September 2024, the National Healthcare Security Administration proposed the concept of a "1+3+N" multi-level healthcare security system, in which commercial health insurance is to play a role. In September 2025, the National Financial Regulatory Administration's "Guiding Opinions on Promoting the High-Quality Development of Health Insurance" clarified that "by 2030, the important role of health insurance in the national health security system will be further enhanced."
"In recent years, the value of commercial health insurance within the national healthcare security system has been more fully reflected and has gained widespread social recognition," said Wang Guojun, Assistant Dean and Professor at the School of Insurance, University of International Business and Economics.
Traditional commercial medical insurance primarily covers expenses within the basic medical insurance catalog, providing some supplementary reimbursement after basic医保报销. In recent years, based on customer demand, many products now include coverage for expenses outside the basic catalog and for innovative drugs, such as specific drug insurance, million-yuan medical insurance, Huimin Bao, and mid-to-high-end medical insurance, playing a significant compensatory role for patients' high medical costs.
Simultaneously, as the implementation of Diagnosis-Related Groups (DRG) and Big Disease Insurance (DIP) payment reforms progresses, healthcare security departments also expect commercial health insurance to play a greater role. In December 2025, the National Healthcare Security Administration released the first edition of the "Commercial Health Insurance Innovative Drug Catalog" (hereinafter referred to as the "Commercial Insurance Innovative Drug Catalog"). In the same month, the National Healthcare Security Work Conference proposed supporting the development of commercial health insurance and improving the multi-level healthcare security system. It emphasized supporting the connection and complementary, differentiated development between commercial health insurance and basic medical insurance. It also urged the active implementation of the Commercial Insurance Innovative Drug Catalog and encouraged commercial health insurance to include more reasonable medical expenses outside the basic medical insurance catalog within its coverage.
Wang Guojun believes that while basic medical insurance can achieve broad coverage, it is difficult to fully meet the public's higher-level health security needs, such as for special medical services, high-end devices, and innovative drugs. The development of commercial health insurance can, on one hand, help share the pressure on the basic medical insurance fund through market mechanisms, and on the other hand, incentivize reforms on the healthcare supply side, promoting the research and development of innovative drugs and medical devices. Essentially, it builds a "multi-level, diversified" healthcare security system on the foundation of "basic coverage," allowing different income groups to find suitable health security solutions.
However, industry insiders admit that commercial health insurance has not yet fully realized its role as a multi-level payer for medical costs. There is a long way to go for commercial health insurance to evolve from primarily raising funds to significantly increasing claim payments and fully undertaking the payment function on the medical service side.
"High-quality development of health insurance cannot be achieved by insurance companies working behind closed doors; it must actively integrate into the broader context of the reform and development of the 'Three Medicals' linkage, starting from the deep integration of medicine, medical care, and the health industry," said the aforementioned insurance executive. The operation of health insurance needs to shift from isolated efforts to ecological collaboration, transforming from a passive payer into a resource integrator and ecosystem enabler.
Senior insurance scholar Zhu Junsheng stated that, considering the first Commercial Insurance Innovative Drug Catalog and the requirements of the Government Work Report, the next steps for commercial health insurance in safeguarding innovative drugs could focus on key areas such as accessibility, tiered protection, payment coordination, and the integration of systems and markets.
A relevant person in charge of Zhonghui Mutual Insurance mentioned that the implementation of the Commercial Insurance Innovative Drug Catalog is driving a restructuring of the insurance product system: firstly, developing specialized drug insurance to complement existing medical insurance and enhance appeal to high-net-worth individuals; secondly, refining coverage responsibilities for innovative drugs, clarifying reimbursement ratios and limits, achieving an upgrade from "vague promises" to "clear terms"; thirdly, promoting tiered product design to meet the differentiated needs of people with varying consumption capacities.
Against this backdrop, what are the key focuses for the development of commercial health insurance, and how can they be implemented specifically?
"Products are the most direct carrier of insurance services and the bridge connecting the company and customers. The first priority is to drive product innovation," said the senior executive from the large insurance company. It is necessary to provide a rich variety of comprehensive health and medical products covering the entire lifecycle, tailored to the various health risks people face and focusing on different medical scenarios. "The space for multi-level, three-dimensional medical insurance is very large." Simultaneously, the commercial long-term care insurance market during the "15th Five-Year Plan" period also holds potential.
The second key development area mentioned by the executive is expanding the coverage population, moving from covering the "healthy" to including the "substandard risks" or "those with pre-existing conditions," essentially shifting from "insuring healthy people" to "insuring people's health." The third focus is on the entire cycle of disease occurrence, providing holistic health solutions encompassing pre-disease prevention, during-disease management, and post-disease rehabilitation. Disease insurance should upgrade from simple赔付 to comprehensive health solutions throughout the cycle.
However, product innovation, insurance for substandard risks, and health solutions all pose new challenges to insurance companies' capabilities. In terms of product innovation, insurers need to enhance their precision pricing capabilities. The executive mentioned that a key role of insurance actuarial science is to manage future uncertainties. Insurance companies must strengthen data collaboration with medical institutions, healthcare security platforms, health management organizations, the pharmaceutical industry, and external institutions. While ensuring security and compliance, they should strive to build integration based on medical big data, health behavior data, and claims data to accurately identify risks and predict future changes.
Regarding insurance for substandard risks, Ding Junfeng, Vice President of Taikang Online, once stated that operating such insurance has a high barrier to entry and cannot be done well relying solely on traditional insurance company core competencies. She analyzed that traditional insurance product actuarial practices are based on the law of large numbers, where pricing key is the disease incidence rate across age groups—more of a statistical problem. However, once venturing into insurance for substandard risks, it deeply involves medical issues. The occurrence, progression, and the associated drugs, treatments, and health interventions for each disease all impact disease incidence rates and medical costs, thereby affecting insurance product pricing. Therefore, the business of insuring substandard risks requires close collaboration between insurance companies and medical service networks, pharmaceutical companies, the pharmaceutical distribution industry, and the health service and health management industries. It requires disease management capabilities and industry integration capabilities.
"Operating health insurance business must break down industry barriers, actively integrate into the domestic circulation of medical care, medical insurance, and medicine, and build a symbiotic and integrated health ecosystem," said the large company executive. This involves several levels. At the business level, it is essential to achieve synergy with the medical industry, innovate insurance products, while also addressing the high cost of innovative drugs, thereby aiding the innovation of the pharmaceutical industry. At the capital level, it involves acting as long-term patient capital, making deep investments in the "insurance + health and elderly care" ecosystem through diversified investment methods such as direct investment, equity holdings, and minority stakes.
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