Mutual Medical Aid for Retired Workers in China: An Empirical Evaluation from the Perspective of Social Solidarity Theory

In the landscape of modern welfare, societies often rely on two main pillars to protect people from the financial shock of illness: the state, which provides a broad safety net for everyone, and the market, where individuals buy private insurance based on their personal risk. But there is a third, older force that sits between them: mutual aid. This is the practice where a group of people, bound by a shared identity or community, pool their resources to help those among them who fall on hard times. Unlike a government program that is mandatory or a private company that seeks profit, mutual aid thrives on trust and the simple idea that we are stronger together. As populations around the world grow older, the cost of healthcare rises, putting pressure on both state systems and private markets. Older adults often find themselves in a difficult spot: they need more medical care, but they have less income, and private insurers often charge them too much or refuse to cover them at all. This leaves a gap in protection where a serious illness could still lead to poverty, even in countries with advanced healthcare systems.

Researchers in China have been watching a unique experiment to see if this old idea of mutual aid can be revived to fill that gap. In Shanghai, a program known affectionately by retirees as "second medical insurance" has been running for over two decades. It is designed to step in after the basic government insurance has paid its share, helping retired workers cover the remaining costs of hospital stays and serious illnesses. The program is not run by a bank or a private corporation, but by a workers' mutual aid association that works closely with employers. The core question for scientists is whether this system actually works to share risk fairly, and more importantly, whether it does more than just move money around. Does it create a sense of belonging and security for the people it serves, or is it just a cold financial transaction? A new study by Xiaojun Wu from Donghua University dives deep into how this program functions, looking at the numbers behind the money and the feelings behind the claims.

To understand how this program works, the researcher looked at a specific group of people: the retired faculty and staff of Donghua University in Shanghai. This university, like many in China, pays the full cost of this mutual aid insurance for all its retired employees as a benefit. The study examined data from 2021 to 2024, tracking every single person who enrolled and every single claim they made. The researchers also surveyed 72 retired workers who had received money from the program to ask them how they felt about the experience. The goal was to build a complete picture, connecting the hard facts of the financial system with the human experience of the people relying on it.

The results show that the program is remarkably effective at bringing people together. Because the university enrolled everyone automatically, nearly 99 percent of eligible retirees were covered. This high participation rate is crucial because it prevents a common problem in insurance where only the sick or worried people sign up, which can bankrupt a system. Instead, the group includes everyone, from the relatively healthy to the very old. The money flows exactly where it is needed most. The study found that the oldest members of the group, those in their 80s and 90s, received a disproportionately large share of the payouts. While they made up a smaller portion of the total group, they received more than a third of all the money paid out. This confirms that the system is successfully shifting resources from the younger, healthier retirees to the older, sicker ones, acting as a true safety net for those facing the highest medical costs.

The financial numbers tell a story of robust support. Over the four years studied, the total amount paid out in claims was significantly higher than the total amount collected in premiums. For every unit of money put into the pot, more than 1.3 units came back out to the people who needed it. This is not a sign that the system is failing; rather, it is evidence that the risk-sharing mechanism is working as intended. The funds are being used to cover the real costs of illness, providing a financial floor that prevents retirees from falling into poverty due to medical bills. One specific case highlighted in the data involved a 95-year-old retiree who received a large sum to cover end-of-life hospital costs, illustrating how the program acts as a "fuel in the snow" for those in the most desperate situations.

However, the study also uncovered a fascinating layer of human emotion that goes beyond the money. When the researchers asked the retirees about their experience, they found that the program had become something more than just an insurance policy. For 83 percent of the people surveyed, receiving the money made them feel a strong sense of belonging and warmth. Many described it as a reminder that the organization still cared about them, even after they had left their jobs. The system had evolved into what the researcher calls a "socio-psychological institution." It was not just paying bills; it was reinforcing a social bond. The fact that the payments were automatic, requiring no application from the retirees, contributed to a 100 percent satisfaction rate with the service itself. The process was seamless, and the money arrived without the retiree having to jump through hoops.

Yet, there was a significant gap in understanding that the researchers identified. While the money arrived automatically, about one-third of the retirees did not fully understand where it came from or what it was for. For some, the payment appeared as a "silent remittance"—a deposit in their bank account with no explanation. These individuals received the financial help they needed, but they missed the social message. They did not realize that the money was a gift from their former workplace community, designed to show care and solidarity. This lack of clarity meant that for some of the most vulnerable people, the program failed to deliver its full emotional value. They got the cash, but they didn't get the feeling of being remembered.

The study also looked at what the retirees wanted to see improved. The most common request, made by three-quarters of those surveyed, was to expand the scope of what the program covers. They wanted protection for more types of medical expenses and higher reimbursement limits. This desire for more coverage is interesting because it suggests that the program has been so successful in building trust and showing care that people now expect it to do even more. The researchers note that this is a sign of a healthy, growing relationship between the institution and its members. The retirees are not asking for the program to be fixed because it is broken; they are asking for it to be strengthened because they believe in it.

The findings suggest that the Shanghai model offers a powerful lesson for how societies can care for their aging populations. It shows that a system built on the principle of mutual aid, supported by the organizational structure of a workplace, can achieve both financial efficiency and deep emotional connection. The program successfully bridges the gap between the basic government safety net and the expensive private market. It proves that when a community organizes itself to care for its own, it can create a system that is not only financially sound but also psychologically comforting. The key to its success lies in the combination of a reliable, automatic payment system and the underlying sense of shared responsibility.

However, the study also points out that this model is not perfect and needs to evolve. The "silent remittance" issue highlights a need for better communication. The researchers argue that the system should not just send money; it should also send a message. Every payment should come with a clear note explaining its source, turning a cold transaction into a warm gesture of care. Additionally, the program currently relies heavily on employers to pay for it. This works well for retirees who had stable jobs, but it leaves out those who did not. The researchers suggest that to make this model truly universal, there needs to be a way to support retirees who do not have an employer to back them, perhaps through government subsidies or other mechanisms.

Ultimately, this paper reveals that the most effective way to protect the elderly may not be found solely in the state or the market, but in the reactivation of social bonds. The Shanghai "second medical insurance" program demonstrates that when a community comes together to share risk, it creates a safety net that is both financially strong and emotionally rich. It transforms the abstract idea of mutual aid into a tangible experience of care. For the retirees involved, it is not just about the money; it is about knowing that they are part of a group that looks out for one another. As populations continue to age, this blend of financial protection and social solidarity offers a promising path forward, showing that the oldest forms of human cooperation can still solve the newest challenges of modern life.