Abstract: Enhancing the long-term care insurance system is crucial amid population aging, the Healthy China strategy, and priorities outlined in the 20th National Congress report. Since its 2016 pilot launch, assessing how diverse urban system designs impact residents’ happiness and identifying effective models for national implementation are pivotal for finding optimal solution in long-term care and adjusting policy in a larger scope. This study employs fuzzy set qualitative comparative analysis to uncover configurations within long-term care insurance designs that influence resident happiness. Results indicate that no single factor independently promotes happiness; instead, integrated basic elements, involvement of commercial insurers in operations, and benefit-oriented approaches play pivotal, primary, and complementary roles in enhancing resident happiness. These findings provide valuable insights for optimizing long-term care solutions and refining policy at a broader scale.