Introduction <p>To improve the multilevel older adult care service system in China, the central government has been allocating special lottery public welfare funds through a reward-subsidy mechanism for five consecutive years since 2016 to conduct a home and community-based older adult care service reform pilot.</p> Methods <p>Based on the gradual expansion of the pilot, this study uses CHARLS 2013–2018 micro data and the difference-in-differences method to empirically test the impact of the first batch (2016) and the second batch (2017) of pilots on older adults’ life satisfaction. And the dependent variable life satisfaction is measured by older adult’s answer and assignment value decreases from 5 to 1.</p> Results <p>The estimated results indicated that the pilots had a significant impact on older adults’ life satisfaction, with the probability of being very satisfied and extremely satisfied increasing by 0.020 (<i>p</i> &lt; 0.05) and 0.008(<i>p</i> &lt; 0.05), respectively. Moreover, the effects of the pilot varied among different types of older people. Robustness tests confirmed the basic validity of the benchmark regression. Regarding mechanism analysis, the pilots enhanced older adults’ life satisfaction by reducing the demand for family care, improving the psychological state of older adults, and increasing their participation in social activities.</p> Conclusions <p>It is necessary to fully leverage the role of central financing concerning support, policy guidance, and performance evaluation. It is also important to summarise and share experiences from the pilots, clearly identify and fully recognise developmental challenges, and strive to solve them.</p>