The cost of employee medical plans has been increasing around the globe, with the highest increases in the Middle East and Africa and the Asia Pacific regions, according to a report from Aon.
The 2025 Global Medical Trend Rates Report shows that the highest forecasted rate increases are in the Middle East and Africa region at a rate of 15.5%.
APAC followed with an expected global projected increase for 2025 of 11.1%, up from 9.7% last year, and representing the highest increase forecasted in 10 years.
Both regions are higher than the global projected increase for 2025 of 10.0%, slightly below the 10.1% increase in 2024.
Latin America and the Caribbean (LAC) also had a rate higher than the average global rate of 10.7%, though this was one percentage point below the rate for 2024.
Other regions saw a slight decline in their forecasted rates compared to 2024, with North America forecast to have an increase of 8.8% and Europe slightly higher at 8.9%.
Trend rate figures represent the percentage increase in medical plan costs per employee – both insured and self-insured.
The high medical trend rate can be attributed to a higher incidence of cancer and chronic conditions than before the Covid-19 pandemic.
APAC region
Looking more closely at the 16 countries surveyed in the APAC region, New Zealand was shown to have the highest expected rate of increase at 17%. The lowest was Japan, with an expected increase of 0.9%.
The survey also showed that prescription and specialty medications, including weight loss medication, innovations in medical technology, and geopolitical factors, are significantly impacting medical trend rates in APAC and around the world.
Support for emotional health is the fastest-growing claim in Aon’s APAC client portfolio. Wellbeing initiatives designed to mitigate stress, along with other plan enhancements, are also contributing to the double-digit medical trend.
Alan Oates, head of global benefits for Asia Pacific at Aon, said: “The biggest rise in medical utilisation and inflation are now behind us in APAC, but recovery in insurer profitability is expected to keep medical trend rates in the double digits for 2025 and 2026.
“The high medical trend rate can also be attributed to a higher incidence of cancer and chronic conditions than before the Covid-19 pandemic.
“Managing the impact of medical inflation therefore should be a top priority for all southeast Asia markets and especially important in New Zealand, Papua New Guinea, Thailand and Vietnam, which are seeing 50 to over 100% increases compared to last year,” Oates explained.
Wellbeing programmes
Wellbeing programmes, plan design changes, alternative financing, data and analytics and flexible benefits are among the top strategies employers are expected to undertake in 2025 to affordably promote a healthy workforce.
Oates said: “More than at any point in the last 10 years we have observed employers taking steps to reduce plan design due to affordability.
“Flexibility and choice have been a valuable tool in design change because employees generally place a greater value on shorter-term flexibility and choice than they do on longer-term core benefits.
“Alternative funding will not materially reduce cost, which is generally determined by claims and scale, but it can smooth cost volatility over a longer period than is possible with direct insurance and that is helpful in this volatile market,” Oates added.