Asia-Pacific Long Term Care Market Outlook, 2031

Market Drivers

• Unprecedented demographic aging across the region: Asia Pacific is experiencing the most rapid demographic transformation in the world, with countries transitioning from aging to super-aged societies in decades rather than centuries. Japan's population aged 65 and above reached 36.19 million in 2025, representing 29.4% of the total population, the highest share among countries with more than 40 million people. South Korea formally entered super-aged society status in 2025, with 10.72 million elderly residents accounting for 20.7% of the population, while the working-age population fell below 70% for the first time since census records began. China's population aged 60 and above reached 323.38 million at the end of 2025, representing 23.0% of the total population, with 223.65 million aged 65 and above. India's elderly population of 153 million is projected to more than double to 347 million by 2050. The prevalence of chronic conditions, cognitive impairment, and functional limitations among these rapidly growing older populations creates sustained and intensifying demand for long-term care services across all care settings.
• Expansion of long-term care insurance and policy frameworks: Governments across Asia Pacific are implementing comprehensive policy reforms to address the growing demand for long-term care. China's long-term care insurance system has expanded from 15 pilot cities in 2016 to 92 cities by the end of 2025, covering 308.55 million insured persons with cumulative fund spending exceeding 100 billion yuan, benefiting more than 3.3 million disabled individuals. The Chinese government issued guidelines in late March 2026 to expand the scheme nationwide by 2028, with funding from employers, individuals, government, and social resources. South Korea's Long-Term Care Insurance for the Elderly now covers more than one in ten seniors aged 65 and above, with 1.235 million recognised beneficiaries in 2025. Australia implemented the Support at Home program on 1 November 2025, replacing the Home Care Packages Program with eight levels of care, an end-of-life pathway offering up to $25,000, and expanded assistive technology funding. Japan continues to refine its long-term care insurance system, with the Fiscal System Council proposing ability-based fees to address the projected increase in care costs to ¥27.6 trillion by 2040.
• Shift toward home and community-based care: Across the region, long-term care delivery is increasingly shifting from institutional facilities to home and community settings. In South Korea, home-based care accounted for 63.0% of total benefit payments at 10.1897 trillion won in 2025, growing by 10.3% compared to the 8.0% rise in institutional care. Australia's Support at Home program is designed to enable more people to age in place, with expansion to support 380,000 individuals by 2025-26 and the highest level of annual funding reaching approximately $78,000 per person. China's 14th Five-Year Plan period (2021-2025) saw the cumulative construction of 570,000 home-based elderly care beds and the provision of 30 million home-based elderly care services. Japan's long-term care insurance system continues to prioritise home-based services, with approximately 4.48 million people receiving home-based care compared to 970,000 receiving institutional care.

Market Challenges

• Critical workforce shortages and caregiver crisis: Asia Pacific faces a severe and intensifying workforce crisis that threatens the sustainability of long-term care systems across the region. Japan requires 2.4 million care workers but faces a shortage of 250,000, which is projected to expand to 570,000 by 2040. Over 64% of Japan's special nursing homes report staff shortages, with the average shortage per facility increasing to 5.5 workers, up 1.9 from the previous year. More than 40% of Japanese care workers are aged 50 or older, with nearly 8% aged 65 or older, creating a concerning "elderly caring for elderly" dynamic. Australia needs nearly 120,000 more aged care staff by 2035/36, including nurses, nurse practitioners, and personal care workers, yet the Aged Care Industry Labour Agreement programme has brought only 249 overseas recruits since May 2023. China faces a caregiver shortage exceeding 5 million, with 85%–95% concentrated in the home and community sector. India has only 5,000–6,000 trained caregivers despite its elderly population of 153 million. These workforce constraints limit the availability and quality of long-term care services across the region.
• Infrastructure deficits and capacity constraints: Despite significant investment, many Asia Pacific countries face substantial infrastructure deficits relative to their aging populations. Japan's special nursing homes have 225,000 people on waiting lists as of April 2025, despite an occupancy rate of 94.5%. Australia had only 236,894 operational residential and flexible aged care places as of June 2025 an increase of just 917 places from the previous year while the population aged 85 and above reached 607,000 and is projected to reach one million by 2035. The number of Australians waiting for a home care assessment reached 121,595 as of July 2025, with 108,924 individuals on the waitlist for an approved but unallocated package. China has 395,000 elderly care institutions and facilities with 7.679 million beds, but the distribution remains uneven across regions, with rural areas significantly underserved. India operates only 696 Senior Citizen Homes across 29 states and union territories, with 84 new homes selected during 2025-26.
• Rising care costs and financial sustainability pressures: The cost of long-term care continues to rise across Asia Pacific, creating significant financial sustainability challenges for both governments and households. Japan's long-term care costs reached ¥14.3 trillion in fiscal 2025, about four times the level when the system was established, and are projected to reach ¥27.6 trillion by 2040. While premiums have increased two to three times, fees paid by users have remained largely unchanged, with over 90% of users (5.41 million people) paying only 10% of costs. South Korea's long-term care benefit payments reached 17.684 trillion won in 2025, nearly double the 2020 level of 9.8248 trillion won, with the National Health Insurance Service covering 91.4% of the total burden. Australia's aged care sector represents a $40 billion system, with residential aged care spending increasing by 27% over the four-year forward estimates period while new support at home packages increased by just 0.3%. These cost pressures are compounded by rising labour costs, regulatory compliance requirements, and limited public reimbursement rates in emerging markets.

Market Trends

• Technology adoption and digital transformation: Asia Pacific countries are increasingly adopting technology to address workforce shortages and improve care quality. Japan is promoting care robots and AI to reduce the physical burden on care workers, though policy力度 has been criticised as insufficient. The Fiscal System Council has proposed measures to improve efficiency through digitalisation. Australia's Support at Home program introduces quarterly budgets with limited rollover funding and separate funding pools for assistive technology and home modifications, enabling more flexible and technology-enabled care delivery. China's 15th Five-Year Plan (2026-2030) calls for integrating medical and eldercare services, establishing a unified system for assessing seniors' functional abilities, and building a more skilled eldercare workforce through digital platforms. South Korea's National Health Insurance Service is expanding home-based care through telehealth and remote monitoring, with home-visit nursing increasing by 22.8% year-on-year.
• Growth of private sector investment in senior living: Private sector investment in senior living and long-term care is growing across Asia Pacific, driven by favorable demographics and the recognition of long-term care as an investable asset class. China's private hospital sector has expanded rapidly, with approximately 26,000 private hospitals representing 68% of all hospitals. India's senior living market is projected to reach $14.14 billion by 2031, with the organised supply of senior citizen homes at 22,157 units as of June 2025 and occupancy levels in stabilised projects reaching 80-85%. Australia's aged care sector has attracted significant investor interest, with average EBITDARM margins growing four percentage points to 30.1% in 2025. Japan's private long-term care insurance penetration rate reached 10.4% as of 2025, with supplementary insurance products complementing the public LTCI system.
• Expansion of community-based care models and integrated service delivery: The shift toward community-based care is accelerating across Asia Pacific, driven by beneficiary preference, government policies, and the relative cost-effectiveness of home care. China is building a three-tier urban-rural elderly care service network comprising county-level comprehensive platforms, township regional centres, and village-level facilities, with county-level public elderly care institutions covering 100% of counties and 20,500 township centres established. South Korea's home-based care grew by 10.3% in 2025, outpacing institutional care growth, with home-visit nursing increasing by 22.8% year-on-year. Australia's Support at Home program introduces integrated assessments and risk-proportionate regulatory models, with lower requirements for basic support services and separate funding pools for assistive technology and home modifications. Japan continues to expand community-based integrated care systems, with approximately 4.48 million people receiving home-based care services. India's National Programme for Healthcare of the Elderly, now operational in 92% of districts, integrates home, community, and facility-based interventions along with structured caregiver training.

Policies

• Japan's Long-Term Care Insurance system, established in April 2000, is the most mature in Asia Pacific, with 6.01 million beneficiaries receiving benefits in 2025 and total costs of ¥14.3 trillion in fiscal 2025. The Fiscal System Council proposed in November 2025 that nursing care service fees be charged to users based on their ability to pay, expanding the scope of users who pay 20% while setting a ceiling on payments. Nursing care costs are projected to reach ¥27.6 trillion in fiscal 2040, representing 3.5% of Japan's GDP.
• China's long-term care insurance system has expanded from 15 pilot cities in 2016 to 92 cities by the end of 2025, covering 308.55 million insured persons with cumulative fund spending exceeding 100 billion yuan and more than 3.3 million beneficiaries. The government issued guidelines in late March 2026 to expand the scheme nationwide by 2028, with funding from employers, individuals, government, and social resources. The insurance scheme initially targets those with severe functional impairments, with plans to broaden coverage as the economy grows and the system matures.
• South Korea's Long-Term Care Insurance for the Elderly, introduced in 2008, now covers more than one in ten seniors aged 65 and above, with 1.235 million recognised beneficiaries in 2025 and benefit payments reaching 17.684 trillion won. The recognition rate exceeded 90% for the first time since the programme's inception, with Grade 4 beneficiaries accounting for the largest share at 46.8%. Home-based care accounted for 63.0% of total benefit payments, growing by 10.3% year-on-year.
• Australia implemented the new Aged Care Act and the Support at Home program on 1 November 2025, representing the most significant aged care reforms in decades. The Support at Home program offers eight levels of care, an end-of-life pathway offering up to $25,000, and up to $15,000 for assistive technology and home modifications. The reforms include a $2.6 billion investment for Fair Work Commission wage increases for aged care nurses and $4.0 million to expand the aged care surge workforce support.