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Digital EditionGlobal Medical Costs to Rise 9.8% in 2026, Returning to Single-Digit Growth
Medical plan costs worldwide will increase by an average of 9.8% in 2026, marking the first return to single-digit growth rates since 2023 as employers intensify cost containment strategies, according to Aon’s 2026 Global Medical Trend Rates Report.
The projected medical cost increases reveal significant regional disparities that reflect underlying economic and demographic pressures, according to the report.
North America and Asia-Pacific stand alone as regions expecting higher rates in 2026 than 2025, with increases of 9.3% and 11.3%, respectively (up from 8.8% and 11.1%). Europe anticipates the steepest decline, dropping to 8.2% from 8.9%, while the Middle East and Africa region, despite maintaining the highest rates globally at 15.3%, down from 15.5%, shows signs of moderating inflation.
These regional differences emerge against a backdrop of persistent cost pressures from cardiovascular disease, cancer and hypertension—the top three conditions driving medical claims across all markets, Aon said. More than 20 countries identified cardiovascular disease as their primary cost driver, while cancer ranks among the top five conditions in every region surveyed.
“Even as global inflation cools in some markets, health care costs remain under significant pressure,” said Kathryn Davis, a global benefits vice president at Aon. “Rising health care costs have become a pervasive business challenge, requiring organizations to proactively plan and adopt predictive analytics alongside innovative cost management strategies to stay ahead.”
Cost Management Becomes Strategic Priority
The sustained elevation of medical costs has fundamentally shifted employer priorities, with 70% of companies now ranking cost management as their primary strategic focus regardless of size, industry or location, the report said. This shift reflects growing concern over economic uncertainty and the compounding effects of aging populations, particularly in Europe, Asia-Pacific and Latin America.
Organizations are deploying multiple strategies simultaneously to combat rising expenses. Three-quarters of companies plan to negotiate aggressively with existing vendors, while two-thirds intend to conduct formal request-for-proposal processes.
Beyond traditional procurement tactics, employers increasingly embrace structural changes to benefit design, including greater employee cost-sharing, flexible benefit plans and eligibility modifications, the report noted.
The medical trend rate captures more than simple inflation—it encompasses price increases, technological advances, higher utilization rates and escalating prescription drug costs, according to the report. These factors combine to create expense growth that consistently outpaces general inflation, forcing organizations to look beyond traditional cost-cutting measures.
Wellbeing Initiatives Lead Long-Term Solutions
Eighty-six percent of countries report wellbeing programs as their most prevalent cost mitigation measure, Aon noted, reflecting a strategic shift toward prevention rather than treatment. These initiatives serve dual purposes: encouraging preventive care utilization to avoid expensive interventions later and keeping employees engaged in their health to reduce stress-related conditions.
Flexible benefit plans have emerged as the third most common cost control mechanism globally, with two-thirds of surveyed countries expecting to implement them in 2026. This represents a significant increase from the previous year, driven largely by a 10% rise in adoption across Asia-Pacific markets, the report noted.
“By proactively leveraging data and analytics and implementing targeted strategic interventions, employers can better manage their investment, bring to life wellbeing strategies and foster healthier, more engaged teams,” said Michael Pedel, head of global benefits at Aon. “This holistic approach enables organizations to achieve long-term sustainability of costs, adapt to evolving employee needs and mitigate risk.”
Obtain the full report here. &
