China Passes Landmark Medical Security Law
China’s top legislature on August 28 adopted the country’s first dedicated Medical Security Law, establishing a comprehensive legal framework for the world’s largest basic medical insurance network. The law, passed at the 24th session of the Standing Committee of the 14th National People’s Congress (NPC), will take effect on January 1, 2027, according to Xinhua News.
A Historic First for Healthcare Legislation
The Medical Security Law, comprising 7 chapters and 56 articles, marks the first dedicated national legislation in China’s healthcare security field. Previously, medical security was governed by scattered provisions in the Social Insurance Law and various administrative regulations, which lacked unified legal authority. President Xi Jinping signed Presidential Order No. 80 to promulgate the law, as reported by the Chinese government website.
The law establishes a multi-level universal medical security system with basic medical insurance as its mainstay, supplemented by commercial health insurance, charitable donations, and medical mutual aid. It codifies the participation scope, financing methods, and benefit guarantees for employee basic medical insurance, urban-rural resident basic medical insurance, and maternity insurance.
Key Provisions and Highlights
Flexible employment coverage. The law encourages self-employed individuals, part-time workers, and other flexible employment workers to participate in employee basic medical insurance. In 2025, 69.82 million flexible employment and other workers participated in employee basic medical insurance, according to the full text of the law published by Xinhua.
Provincial-level coordination. The law codifies the national push for provincial-level coordination of basic medical insurance, breaking down barriers between different coordination regions. Wang Zhen, a researcher at the Institute of Economics of the Chinese Academy of Social Sciences, said writing provincial-level coordination into law “adapts to the trends of increased population mobility and diversified employment forms,” creating conditions for a more unified universal medical insurance system.
Long-term care insurance. A major highlight is the establishment of a national long-term care insurance system, providing a legal basis for implementation rules after years of pilot programs since 2016. Guo Shuqing, vice chairman of the NPC Financial and Economic Affairs Committee, said the provision “provides a higher-level legal basis for relevant departments to issue implementation rules and promote the implementation of the system.”
Maternity insurance expansion. The law clarifies that employers pay maternity insurance premiums and promotes expanding coverage. Maternity insurance funds and employee basic medical insurance funds are merged into a single account. Wang Zhen noted that encouraging flexible employment workers to join employee medical insurance means “more people are expected to enjoy maternity insurance benefits.”
Cross-province settlement. The law mandates timely and full direct settlement of medical expenses for cross-province treatment. From January to July 2026, 209 million cross-province medical settlement transactions were processed, involving 215.371 billion yuan in medical expenses and reducing patient advance payments by 126.797 billion yuan, according to Xinhua’s English service.
Strengthening Fund Protection and Anti-Fraud Measures
The law imposes strict protections on medical security funds, requiring exclusive use and prohibiting concealment, transfer, encroachment, or misappropriation. Fraudulent claims for medical insurance funds are subject to fines of 2 to 5 times the defrauded amount, suspension of online medical expense settlement for 3 to 12 months for individuals, and other penalties.
Wang Zongfan, director of the Medical Insurance and Nursing Security Research Office at the Chinese Academy of Labor and Social Security Sciences, said the legislation “further clarifies the legal liability for insurance fraud, sending a clear signal of cracking down on fraud in accordance with the law.” In the first half of 2026, the national medical insurance system inspected 330,000 designated medical institutions, handled 280,000 violators, and recovered 16.35 billion yuan in medical insurance funds.
Legislative Journey and Public Input
The law’s passage culminated a multi-year legislative process. The National Healthcare Security Administration first published a draft for public comment in June 2021. The draft was formally submitted for first review in June 2025, underwent second review in April 2026 with six major modifications, and received third review in August 2026 before final passage, as detailed by 21st Century Business Herald.
During the public comment period from June 27 to July 26, 2025, 617 individuals submitted 2,562 opinions through the China People’s Congress website, plus 20 letters. Key themes included protecting citizens’ medical security rights, improving the medical security system, and strengthening medical insurance fund management.
Looking Ahead
The law takes effect on January 1, 2027, giving relevant departments time to develop implementation rules. The establishment of long-term care insurance at the national level and the push for provincial-level coordination signal continued reform of China’s healthcare security system. As Wang Zongfan noted, the law’s dedicated chapter on medical security services will “use the power of law to improve service efficiency, further narrow the service gap between urban and rural areas and regions, and allow more people to enjoy fair and accessible medical insurance services.”
With implementation details still to be finalized, observers will be watching how the new legal framework translates into tangible improvements for China’s 1.3 billion insured citizens.