APAC Employee Medical Plan Costs to Stabilise in 2026 After Two Years of Sharp Increase, Aon reports
- China, India, Singapore, the Philippines and Vietnam projecting lower increases than previous year
- Cardiovascular diseases, gastrointestinal conditions and cancer are top medical conditions that are expected to drive the medical plan costs
The global average medical trend rate 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 than in 2025.
Medical trend rates represent the annual percentage increase in medical plan costs per employee, both insured and self-insured. These figures help organisations budget and adapt their benefits strategies to ensure sustainability in a rapidly evolving healthcare landscape.
"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," said Tim Dwyer, head of Human Capital for APAC, Aon. "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."
Key Findings for APAC:
- Around one third of APAC markets — including China, Singapore, the Philippines, Vietnam and India — expect a slight decrease in trend rates, driven by moderated utilisation and wellbeing initiatives.
- Prescription and specialty medications, innovations in medical technology and geopolitical factors, continue to have a significant impact.
- The remaining two thirds face upward pressure from chronic disease burden, increased healthcare utilisation and adoption of technological advancements.
| | 2025 | 2026 | ||
| Annual General Inflation Rate | Annual Medical Trend Rates (Gross) | Annual General Inflation Rate | Annual Medical Trend Rates (Gross) | |
| Asia-Pacific | 2.8 | 11.1 | 2.4 | 11.3 |
| Australia | 3.0 | 5.1 | 3.5 | 5.2 |
| Bangladesh | 6.1 | 10.0 | 5.2 | 10.0 |
| China | 2.0 | 8.0 | 0.6 | 7.8 |
| Hong Kong | 2.3 | 8.0 | 2.2 | 9.0 |
| India | 4.2 | 13.0 | 4.1 | 11.5 |
| Indonesia | 2.6 | 16.2 | 2.5 | 16.9 |
| Japan | 2.1 | 0.9 | 1.7 | 2.7 |
| Kazakhstan | 7.0 | 29.0 | 9.4 | 29.0 |
| Malaysia | 2.5 | 15.0 | 2.2 | 16.0 |
| New Zealand | 2.5 | 17.0 | 2.0 | 18.0 |
| Pakistan | 12.7 | n/a | 7.7 | 23.5 |
| Papua New Guinea | 4.8 | 12.0 | 4.6 | 15.0 |
| Philippines | 3.0 | 15.0 | 2.9 | 14.0 |
| Singapore | 2.5 | 14.0 | 1.5 | 13.0 |
| South Korea | 2.0 | 10.0 | 1.8 | 11.5 |
| Sri Lanka | n/a | n/a | n/a | 6.5 |
| Taiwan | 1.6 | n/a | 1.6 | 8.0 |
| Thailand | 1.2 | 14.3 | 0.9 | 14.8 |
| Vietnam | 3.4 | 12.9 | 2.5 | 12.2 |
Conditions Behind the Trend Rate
The leading medical conditions expected to influence costs in 2026 in APAC remain largely consistent with the conditions of 2025.
- 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.
- Gastrointestinal Conditions: Issues such as gallbladder stones, infections, acute appendicitis, liver diseases and gastroenteritis are rising and now the second most common cost driver in the region.
- Cancer/Tumor Growth: Cancer remains a top condition globally, with 20 countries –including Australia and Singapore – reporting it as the most impactful. The most frequently diagnosed cancers are lung, breast, colon/rectum, and prostate.
Risk Factors Contributing to the Leading Conditions
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.
How 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.
"The medical insurance market is transitioning into a new phase, and businesses must be ready to deploy strategies that will deliver value" said Alan Oates, head of global benefits for APAC at Aon. "Larger employers should analyse their own medical trend which may be falling faster than market averages. 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. By leveraging data available externally and internally and partnering with insurers, businesses can better anticipate risks and support a healthier, more productive workforce," added Oates.
About the Report
The 2026 Global Medical Trend Rates Report is based on insights from over 100 Aon offices that broker, administer or advise on employer-sponsored medical plans. The findings reflect the expectations of Aon professionals based on their interactions with clients and carriers across the region.
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Disclaimer
The information contained in this document is solely for information purposes, for general guidance only and is not intended to address the circumstances of any particular individual or entity. Although Aon endeavours to provide accurate and timely information and uses sources that it considers reliable, the firm does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of any content of this document and can accept no liability for any loss incurred in any way by any person who may rely on it. There can be no guarantee that the information contained in this document will remain accurate as on the date it is received or that it will continue to be accurate in the future. No individual or entity should make decisions or act based solely on the information contained herein without appropriate professional advice and targeted research
