Aon Plc, a leading global professional services firm based in the UK, released its 2026 Global Medical Trend Rates Report on 15 October 2025. The report projects an 11.3 percent rise in Asia Pacific (APAC) employee medical plan costs, signaling the stabilization of medical plan costs after two years of steep increases. The global average medical trend rate, which represents the annual percentage increase in medical plan costs per employee, both insured and self-insured, is expected to be 9.8 percent. Key APAC markets like China, India, Singapore, the Philippines and Vietnam are forecasting lower medical trend rate increases in 2026 than in 2025.
The Asia Pacific region is continuing double-digit medical trend rates, the figures that help organizations budget and adapt their benefits strategies to ensure sustainability in a rapidly evolving healthcare landscape. Tim Dwyer, the head of Human Capital for APAC, Aon, says, “The Asia Pacific region continues to face double-digit medical trend rates, reflecting both the resilience of healthcare demand and the need for medical insurers to return to profitability in order to deliver sustainable healthcare coverage. He further says, “The challenge and opportunity for employers lies in moving from reactive cost control to proactive health strategy. As employers across the region navigate workforce transformation, building resilient and sustainable employee benefits programs will be critical to managing the wellbeing of their workforces.”
As Aon’s report indicates, there are several core findings. Firstly, around one third of APAC markets — including China, Singapore, the Philippines, Vietnam and India — expect a slight decrease in trend rates, driven by moderated utilization and wellbeing initiatives. Secondly, prescription and specialty medications, innovations in medical technology and geopolitical factors, continue to have a significant impact. Finally, the remaining two- thirds face upward pressure from chronic disease burden, increased healthcare utilization and adoption of technological advancements.
But several conditions are responsible for trend rate. The leading medical conditions expected to influence costs in 2026 in APAC remain largely consistent with the conditions of 2025. In terms of cardiovascular disease, disorders of the heart and blood vessels and high blood pressure continue to be the primary cost driver, with the greatest impact on claims across APAC. In gastrointestinal conditions, issues like gallbladder stones, infections, acute appendicitis, liver diseases and gastroenteritis are rising and are now the second most common cost driver in the region. In terms of cancer/tumor growth, cancer remains a top condition globally, with 20 countries — including Australia and Singapore — reporting it as the most impactful. The most common cancers are lung, breast, colon/rectum, and prostate.
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But, as the report of the Aon Plc further indicates, there are various risk factors that contribute to the leading conditions of the trends. Hypertension is both a leading condition and the top risk factor for other costly diseases. Other major risk factors include high cholesterol, physical inactivity, poor nutrition and high blood glucose — all commonly linked to cancer and other chronic conditions.
But, hopefully saying, companies are responding. Employers in APAC are increasingly adopting flexible benefit plans, cost containment strategies and wellbeing programs to manage rising medical costs. According to Aon’s 2025 Global Benefits Trends Study, 25 percent of companies in APAC are expected to use flexible benefits, with many considering measures such as copays or network restrictions. Wellbeing initiatives targeting physical inactivity, stress, hypertension and high cholesterol are being integrated with prevention strategies to mitigate future claims.
But there is a lot to do to address the concerns and ensure the wellbeing of employees. Alan Oates, the head of global benefits for APAC at Aon, says that the medical insurance market is transitioning into a new phase, and businesses must be ready to deploy strategies that will deliver value. Putting emphasis on the importance of analyzing medical trends, he further says, “Larger employers should analyze their own medical trend which may be falling faster than market averages…”.
Highlighting the importance of investing in preventive wellbeing strategies, Alan Oates says, “…Now is the time to use local tendering exercises that will drive market competition as underwriters return to profitability at different rates and continue to invest in preventive wellbeing strategies for sustainable cost management…” He further says that by leveraging data available externally and internally and partnering with insurers, businesses can better anticipate risks and support a healthier, more productive workforce.
Aon Plc
London
The United Kingdom
Email:Jini.pillai@aon.com
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