In meeting the ageing challenge, elderly service is becoming a major project related to people's well-being that concerns the Chinese government and the whole society. Institutionalization of basic elderly services becomes a key issue. Combing the enacted elderly service policies, this paper provides a theoretical perspective of social policy to the institutionalization basic elderly service; analyzes the ideology of elderly service policy, the selection of elderly service model, and the necessity of constructing basic elderly services based on these perspectives; and finally, presents a policy framework of institutionalization of basic elderly services.