China’s legislature passed the Medical Security Law of the People’s Republic of China on August 28, which will take effect on January 1, 2027. Lou Yu, Director of the Center for Social Law and Social Policy Studies at China University of Political Science and Law, has closely followed the legislation and offered professional analysis and recommendations throughout the legislative process. In a recent interview with Economic Observer, Lou discussed how he believes the law will affect China’s medical insurance system and what reforms may follow.
According to Lou, the law changes the wording on medical insurance participation for several groups. While the Social Insurance Law—a separate law—states that flexible workers “may” participate in employee medical insurance, the new law “encourages” such participation, potentially paving the way for future policy or fiscal incentives. It also stipulates that citizens who are not enrolled in employee medical insurance or covered by other medical security programs “shall” participate in basic medical insurance for urban and rural residents, replacing the previous voluntary approach.
Lou noted that the law also states that citizens have a legal obligation to participate in basic medical insurance. However, it does not specify corresponding penalties for residents who fail to enroll, meaning the provision currently has more of a declaratory than enforceable function. In his view, authorities may eventually introduce measures to increase or require participation. For workers with sufficient income but no stable employment relationship, one possibility would be to calculate insurance contributions based on their income and require enrollment above a certain threshold. For people without sufficient income, government subsidies could continue to support enrollment in resident medical insurance.
Source: Economic Observer, September 4, 2026
https://www.eeo.com.cn/2026/0904/1024337.shtml