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A pilot insurance program for seniors who require long-term care due to illness or disability now covers more than 38 million people in 14 cities, the top social security authority has said.

Four cities have already paid compensation to claimants, including Shanghai and Qingdao, Shandong province, and 300 million yuan ($45.3 million) was paid out to reimburse the costs of more than 400,000 long-term care services last year, according to Lu Aihong, a spokesman for the Ministry of Human Resources and Social Security.

On average, claimants are refunded 70 percent of their costs, which can help relieve many families of an economic burden, he said.

"We will promote the program in a proactive but steady way and will report on the experiences to improve the long-term care insurance system," Lu said.

The number of people age 60 or over continues to rise in China. According to the National Health and Family Planning Commission, 16.7 percent of the population - 230 million people - were age 60 or over at the end of last year. The proportion is expected to rise to 17.8 percent by 2020.

In Qingdao, the proportion is greater. At the end of last year, 1.68 million people, or more than 21.3 percent of residents with hukou, or permanent household registration, were age 60 or over, according to the city government.

Qingdao launched its long-term care insurance pilot in 2012. It now covers about 8.2 million people, including elderly and disabled residents, as well as permanent residents and those without hukou.

Those in the insurance plan do not need to pay a premium if they have contributed, or continue to contribute, to the public medical insurance system. Residents receive different coverage depending on whether they live in urban or rural areas, and are employed or unemployed. Compensation payouts for the pilot insurance program also come from the public medical insurance fund.

Qingdao also became the first city early this year to include dementia patients in the program, benefiting about 200 people, according to the city government.

Ren, 89, was diagnosed with dementia in 2009 and is cared for at Chengyang Nursing Home. She often gets confused and loses her way, making it difficult for her daughter to care for her, the nursing home says.

Now she receives 24-hour care. More than 80 percent of the costs of accommodation and nursing are covered by the pilot insurance program, which means her family pays just 3,000 yuan a month, the nursing home said.

The Qingdao government said 500,000 seniors, including almost 100 diagnosed with dementia, have received 120 million yuan toward the cost of long-term care services. Currently, 160,000 seniors in the city have long-term care services covered by the insurance program.

Under the program, beneficiaries" average daily cost for a sickbed has been reduced from 56 yuan to just 4 yuan. By the end of last year, more than 600 people in Qingdao were receiving long-term care from nursing homes, most of which are privately run enterprises, city government data show.