Against the backdrop of high prices for innovative drugs and tightening payment capacity within the national medical insurance system, commercial health insurance is being propelled to the forefront of the multi-tiered medical security system.
On one hand, the scale of payouts by commercial health insurance for innovative drugs and medical devices has experienced rapid growth for several consecutive years, becoming a significant force in bridging the coverage gaps left by basic medical insurance. On the other hand, challenges such as data scarcity, uncontrolled costs, and insufficient risk-pricing capabilities are presenting new hurdles for the industry.
Recently, the Insurance Association of China (IAC) convened a symposium in Beijing on the high-quality development of health insurance. It explicitly stated that, aligned with national goals such as accelerating the construction of a Healthy China, actively responding to population aging, and supporting the development of key national industries like innovative drugs, the industry must actively respond to market demands, adhere to the fundamental principles and objective laws of commercial insurance, and continuously enrich the supply of insurance products.
Focusing on how to support the development of innovative drugs while maintaining a commercially sustainable bottom line, multiple departments are exerting simultaneous efforts across various levels including system construction, actuarial foundations, and industrial collaboration. This aims to help commercial health insurance find a new equilibrium between "supplementing medical insurance" and "adhering to insurance principles."
It is understood that since 2025, the IAC has been actively developing model policy clauses for the commercial medical insurance industry and a payment list for medical insurance drug coverage. The China Society of Actuaries is also mobilizing industry resources to compile a net cost table for commercial medical insurance and is conducting cost calculation and analysis work for innovative drugs.
Data scarcity poses the greatest challenge for commercial insurance in covering innovative drugs. The payment for innovative drugs and devices has become a touchstone for measuring the high-quality development of health insurance. In recent years, the involvement of commercial health insurance in the innovative drug sector has increased rapidly.
Currently, most mainstream medical insurance products on the market include coverage for new technologies, new drugs, and new devices, encompassing high-value technologies such as targeted cancer therapies and proton/heavy ion therapy. Data shows that in 2025, the total payout amount by commercial health insurance for innovative drugs and devices was approximately 14.7 billion yuan, marking four consecutive years of high growth with a compound annual growth rate of 70%.
Analyzing the growth in payouts for innovative drugs and devices by commercial health insurance, Professor Zhu Junsheng, a postdoctoral fellow in applied economics at Peking University, points to two main reasons. First, under the pressure of medical insurance cost control and hospital performance evaluation mechanisms, access to some high-quality medical services (including innovative drugs and devices) through basic insurance is limited, while the public's rigid demand for quality health coverage continues to rise. Second, as a crucial supplement to basic medical insurance, commercial health insurance is fully leveraging its multi-payer function, effectively filling the coverage gap for high-cost medical services like innovative drugs and devices, and becoming a key support for the public to access these services.
Furthermore, Zhu Junsheng added that the deepening cooperation between insurance companies and the pharmaceutical industry, along with continuous product innovation that expands the coverage boundaries for innovative drugs and devices, has brought more high-value treatments under the umbrella of commercial health insurance, directly driving the steady growth in payout scale.
Although commercial health insurance payments for innovative drugs and devices are growing rapidly, there remains significant room for expansion. The "China Innovative Drugs and Devices Multi-Payer White Paper (2025)" indicates that the sales of innovative drugs in 2024 are projected to reach 162 billion yuan. Within this, basic medical insurance funds cover approximately 44%, out-of-pocket payments account for about 49%, while commercial health insurance contributions make up only 7.7%.
Mai Lun, a practitioner at a life insurance company, pointed out in an interview that health insurance is the blue ocean market with the most growth potential in the insurance industry, especially against the backdrop of population aging and the "Healthy China" strategy. Meeting the multi-tiered medical needs spilling over from basic insurance represents a huge business growth opportunity, and covering innovative drugs is a core reflection of the competitiveness of commercial health insurance products.
Behind the rapid growth in payouts for innovative drugs and devices by commercial health insurance lies the "risk black hole" faced by insurance companies. "The lack of reliable incidence data and cost data makes pricing akin to the blind men touching an elephant. The rapid rise in loss ratios directly erodes insurance company profits and can even lead to losses," Mai Lun noted.
Zhu Junsheng similarly stated that the challenge of risk assessment due to insufficient clinical data for innovative drugs and devices is one of the biggest hurdles commercial health insurance faces in providing coverage for them.
In response to the risk challenges of covering innovative drugs, the China Society of Actuaries has stated that it is organizing industry resources to compile a net cost table for commercial medical insurance and is actively engaged in cost calculation and analysis work for innovative drugs.
"The net cost table for commercial medical insurance is the lifeline for the refined management of health insurance," in Mai Lun's view. Net cost, meaning pure risk cost, is the foundation of insurance pricing. For a long time, the industry has lacked unified, authoritative, and dynamically updated empirical incidence data, leading to product pricing that often relies on limited internal experience or simple reinsurance data, resulting in insufficient risk assessment capabilities. Compiling an industry-wide net cost table will provide insurance companies with a "benchmark anchor," making it possible to improve the "alignment between insurance premium rates and underwriting risks."
Mai Lun stated that conducting cost calculation and analysis for innovative drugs directly addresses the industry's biggest pain point—the uncontrolled costs of innovative drugs and devices.
Additionally, Mai Lun pointed out that the work of the China Society of Actuaries is essentially building a data infrastructure and underlying risk control framework for the entire industry. With this foundation, insurance companies can truly achieve "scientific and rational pricing, optimized product supply," thereby realizing high-quality development.
Apart from the China Society of Actuaries announcing the start of related compilation work, at this symposium, the IAC also stated that it is actively developing model policy clauses for the commercial medical insurance industry and a payment list for medical insurance drug coverage.
Mai Lun indicated that the model policy clauses for commercial medical insurance aim to unify and standardize product design, avoid恶性竞争, unrealistic coverage promises, and claims disputes, set an operational "bottom line" for the industry, and stabilize market expectations.
"The payment list for medical insurance drug coverage is even more significant," Mai Lun said. It signifies that the insurance industry is attempting to take the lead in establishing its own "commercial insurance formulary," shifting from passively accepting "bills" to actively screening and evaluating the value of drugs and technologies, and making payments based on this assessment.
Zhu Junsheng pointed out that the industry-unified risk benchmark provided by the net cost table for commercial medical insurance enables the quantitative assessment of risks like those associated with innovative drugs and devices. This not only helps insurance companies implement differentiated pricing, avoiding losses or insufficient coverage caused by blind pricing, but also significantly enhances the alignment between pricing and risk.
While strengthening risk control capabilities through institutional infrastructure on the payment side, the insurance industry is accelerating its deep transformation from a mere "financial payer" to an "industrial collaborator," permeating downstream industrial chains through capital ties.
The China Banking and Insurance Asset Management Association stated at the symposium that currently, insurance funds, leveraging their unique advantages of large scale, long-term nature, and stable sources, are deeply participating in national strategies, injecting strong momentum into the upgrade of the medical, health, and elderly care industries, and becoming an important financial force in cultivating new quality productive forces.
Data shows that as of 2025, the total registered scale of investments in medical-related areas through three types of products—credit investment plans, equity investment plans, and insurance private equity funds—exceeded 150 billion yuan.
In terms of direct equity investment, as of the third quarter of 2025, insurance funds had directly invested nearly 30 billion yuan in the medical and elderly care fields, covering various sub-sectors such as biotechnology, new drug technologies, genetic technology, medical devices, and medical groups.
In the realm of indirect investment, the fund balance of insurance funds invested in the medical and health field has exceeded 250 billion yuan, covering core areas of the large health sector like medical services, innovative drugs, medical devices, and medical data.
Zhu Junsheng pointed out that the long-term value of insurance funds in the medical and health industry is mainly reflected in three dimensions: First, as long-term capital suppliers, they fill the capital gap for areas requiring long-term investment, such as medical infrastructure and innovative drug R&D, providing stable financial support for the implementation of projects like primary healthcare and inclusive elderly care.
Second, as ecosystem integrators, they link hospitals, pharmaceutical companies, and health management institutions to build a service闭环 of "prevention-diagnosis-rehabilitation-insurance," enhancing the overall operational efficiency of the industry.
Third, as payers and risk sharers, they improve the accessibility of medical services while complementing basic medical insurance, sharing the payout pressure for high-cost coverage like innovative drugs and devices, and perfecting the multi-tiered health security system.
Information disclosed by the National Financial Regulatory Administration shows that leading insurance companies are accelerating their penetration into the medical industry chain by establishing large health industry funds.
The China Life Large Health Fund has invested in a group of leading enterprises in China's medical and health industry. The underlying portfolio of China Taiping's large health investments covers approximately 300 innovative drug companies; funds under PICC Group and the Taiping Medical and Health Fund have also entered the fray, providing targeted support to numerous innovative drug and related industrial chain companies.
New China Life Insurance, on the other hand, has successively increased its stakes in China National Medicines Corporation Ltd. (600511.SH) and Shanghai Pharmaceuticals Holding Co., Ltd. (601607.SH). To meet diversified, high-quality health management needs, it has partnered with New Frontier Group to upgrade the integrated "insurance + medical health" model, providing customers with medical and health solutions that cover the entire lifecycle.
Prior to the IAC's symposium on the high-quality development of health insurance, the National Healthcare Security Administration and the Ministry of Human Resources and Social Security jointly released the "National Basic Medical Insurance, Maternity Insurance, and Work-Related Injury Insurance Drug List" and the first edition of the "Commercial Health Insurance Innovative Drug List" at the end of 2025, announcing that they would be officially implemented starting January 1, 2026.
Mai Lun stated that the National Healthcare Security Administration and the National Financial Regulatory Administration both serve the top-level goal of "Healthy China," but there exists a subtle relationship of both cooperation and博弈 regarding specific pathways and division of responsibilities.
He analyzed that the National Healthcare Security Administration views commercial health insurance as a necessary supplement and strategic ally for sharing the pressure on the medical insurance fund and meeting multi-tiered medical needs.
It actively creates market space for commercial health insurance by strictly controlling the medical insurance formulary, promoting DRG/DIP payment reforms, piloting medical insurance-commercial insurance settlement centers, and releasing the first commercial innovative drug list. Its stance is to actively "push" payment responsibilities towards commercial insurance, hoping that commercial insurance can take over quickly. From its perspective, the faster and broader the development of commercial insurance, the less pressure it faces.
"The primary consideration for the National Financial Regulatory Administration's decision-making is 'risk prevention and promotion of development,' possessing a strong market-oriented and commercial attribute," Mai Lun pointed out. The National Financial Regulatory Administration supports the insurance industry in serving national strategy while being commercially sustainable. Facing the pressure "pushed" by the National Healthcare Security Administration, its role is more like "pulling" on the reins to prevent insurance companies from "galloping" out of control under pressure and temptation. It must ensure that when insurance companies undertake responsibilities, they do so after prudent risk assessment and scientific pricing.
Mai Lun particularly emphasized that there is no principled disagreement that basic medical insurance "covers the basics" and commercial insurance "supplements diversity," but the boundary between "basic" and "diverse" is dynamically changing.
"Every adjustment to the medical insurance formulary directly affects the business space and payout responsibilities of commercial insurance," Mai Lun said. The National Healthcare Security Administration hopes this boundary is clearer, allowing commercial insurance to承担更多; whereas the National Financial Regulatory Administration hopes that when insurance companies cross this boundary, it is an active choice rather than passive acceptance, and that they possess risk identification and management capabilities.
It is understood that at this symposium, the IAC emphasized adhering to the fundamental principles and objective laws of commercial insurance and continuously enriching the supply of insurance products.
Mai Lun pointed out that in the past, health insurance, especially products like "Hui Min Bao," to some extent shouldered a pan-welfare social responsibility, leading to challenges for its commercial sustainability. This statement is a clear signal sent by the National Financial Regulatory Administration to the market through the industry association: health insurance is first and foremost "insurance," and must follow the commercial principles of risk-based pricing, balance of income and expenditure, and prudent operation. It cannot无原则、无底线地承担无限的 payment responsibilities. This is a reflection and correction of the past development of commercial health insurance.