Global medical trend rate expected to be 10% for 2025
As we navigate the complexities of the global healthcare landscape, understanding medical trend rates is crucial for employers, policymakers, and healthcare providers.
Aon’s 2025 Global Medical Trend Rates Report estimated medical trend rate forecasts for 112 Aon countries and locations around the world.
Aon professionals were asked for their insights on how they expect medical rates to change, based on their consultations with clients and the carriers represented in their medical plan portfolio. These Aon offices broker, administer or otherwise advise on employer-sponsored medical plans throughout the world.
This comes at what may be an economic inflection point, with global annual general inflation expected to decrease for the first time in four years.
However, the period of remarkable inflationary conditions and economic volatility that has defined the post-pandemic world continue to be felt, with the global medical trend rate for 2025 expected to be 10.0%, just shy of 2024’s global average rate of 10.1%, which was the highest increase forecasted in a decade.
Regional highlights
The 2025 Global Medical Trend Rates Report highlights regional variations in medical cost increases, with APAC expecting the highest rise at 11.1%, North America at 8.8%, MEA at 15.5%, LAC seeing a decrease to 10.7%, and Europe benefiting from lower inflation, predicting a decrease to 8.9%.
In the UK however, the rate is projected to be 17%. These insights help companies plan budgets and manage medical expenses effectively.
Key medical conditions and risk factors
The report identifies the top medical conditions driving plan costs in 2025. Cardiovascular diseases have overtaken cancer as the leading condition, particularly impacting claims in APAC, Europe, and LAC regions.
Spotlight on the UK
In the UK, private medical schemes have seen a significant rise in claims post-COVID-19. This surge, coupled with challenges in accessing NHS services, has led to higher premium costs and increased usage of private medical insurance.
Mitigating rising costs
Employers are adopting various strategies to manage rising medical costs. These include considering alternative global benefits financing arrangements, prioritising data analysis of disability and health claims, and integrating benefits with wellbeing initiatives.
Flexible benefit plans are increasingly used to control costs and offer adaptive benefits that meet individual needs and support diversity, equity, inclusion, and belonging (DEIB) initiatives.
As medical plan costs continue to rise, understanding these trends and implementing effective mitigation strategies is crucial for employers worldwide.
Aon’s 2025 Global Medical Trend Rates Report aims to help companies:
- Plan their budgets for premium renewal costs
- Understand the key factors that are driving medical cost increases
- Gain insight into ways that companies are proactively managing their medical expenses.
