01 Apr 2026

Healthcare claims trends and what they mean for cost inflation and benefits design

Healthcare claims have risen since the pandemic adding to the costs to employers but other trends are beginning to have an effect.

Healthcare cost volatility remains a major challenge for employers. The pressure on employer plans generally comes from four directions:

Rising spend
Increased demand for care
Constrained access in public systems
Tough design trade-offs

A key shift over the last four to five years is that much of the increase in healthcare costs is being driven by utilisation rather than pure price inflation. Membership and claims incidence have both risen since 2020, with claims now often affecting more than 30% of members compared with around 22–25% before the pandemic.

For employers, understanding what is truly driving healthcare trends (utilisation, treatment costs, or workforce growth) is key to managing benefits sustainably.

The conditions driving healthcare claims

Claims trends are evolving globally. According to global medical trends data, insurers identify cancer as one of the largest cost drivers due to the rapid pace of innovation in treatment.

New therapies and drugs are constantly entering the market, significantly improving outcomes but also increasing costs.

Cardiovascular disease is a rising priority globally and in the UK, and is under-addressed relative to its impact and prevention potential. In the UK, musculoskeletal (MSK) conditions are also one of the most common drivers of claims.

Hybrid working patterns following the pandemic have contributed, with many employees working across multiple locations without consistent ergonomic setups. These conditions may be less expensive individually than oncology treatments but often become chronic and generate repeated claims over time.

Employers will often identify mental health as a major concern too. In fact, Barnett Waddingham research shows that 46% of employees sought treatment for mental health in the past 12 months. While direct treatment costs may be lower than for physical health conditions, the broader impact on productivity - through absenteeism and presenteeism - can be substantial for businesses.

Regional differences in claims trends

Healthcare claims patterns vary significantly by region, often influenced by cultural and political developments, levels of access to social healthcare systems, and expectations around care.

In the UK, medical costs are rising faster than in most other regions. The projected medical trend of 12% for 2026 equates to a real increase of 9.9% after adjusting for general inflation.

Across Asia, particularly in Singapore and parts of Southeast Asia, claims levels have been increasing sharply. One contributing factor is the growing preference for immediate access to care through private healthcare rather than public systems.

In the Middle East, insurers have also reported higher levels of utilisation, in some cases linked to over-treatment. Patients presenting with relatively minor symptoms may undergo advanced diagnostic tests or specialist interventions that are not always clinically necessary, driving up overall costs.

Asia currently experiences some of the highest levels of medical inflation globally. However, regional averages can mask significant differences between individual countries, meaning employers need to understand the specific dynamics affecting each of their workforce locations.

What is driving healthcare cost inflation?

Several structural factors are contributing to healthcare cost inflation worldwide.

An ageing workforce is increasing demand for medical treatment, while medical innovation continues to introduce new therapies and diagnostic technologies that can significantly increase costs.

At the same time, strained public healthcare systems are giving opportunities for organisations to provide an option to access faster diagnosis and treatment through employer-funded private healthcare. Rising expectations from employees are expanding the scope of employer-funded benefits, with organisations increasingly covering areas such as fertility treatment, neurodiversity assessments, and gender-affirming care.

Implications for benefits design

For employers managing global benefits programmes, these trends create a complex balancing act between controlling costs and maintaining competitive, effective benefits.

Organisations that fail to adapt their benefits strategies to align with access and outcomes risk falling behind market expectations, making it harder to attract and retain talent. Furthermore, rising healthcare costs place increasing pressure on corporate budgets and profitability.

In the UK, 64% of employees would be more likely to stay with an employer for longer if they have a good healthcare package, compared to 59% globally (excluding the US). This increases to 69% in Latin America and the Caribbean and 71% in Asia.

A successful strategy requires both short and long-term thinking. Employers must understand how claims trends differ across regions and design benefits accordingly, rather than applying a one-size-fits-all global approach.

How employers can take a proactive approach to cost management

Preventative health strategies will play an increasingly important role in managing long-term healthcare costs. Initiatives such as health screening, early intervention programmes, and accessible wellbeing support can help address health risks before they escalate into more serious and costly conditions.

Network and pathway optimisation, guided access, and digital triage can lower unit costs and drive better outcomes.

Technology adoption is now a competitive variable in healthcare value chains. 74% of employees would trust AI being used in their healthcare journey today, including AI-enabled triage, diagnostics, and remote consultations to improve speed, accuracy, and cost-efficiency in areas like imaging.

Employers should set expectations for transparent, evidence-based AI use and strong governance, including disclosure to employees. Choose partners that can demonstrate real-world AI outcomes and hold them accountable for measurable gains in access, quality, and total cost of care.

Employers should also regularly assess whether their benefits align with what their workforce values most, identifying opportunities to remove duplication or improve efficiency across programmes. Our data shows that 64% want healthcare, but only 15% receive it.

While there is no single solution to controlling healthcare cost inflation, organisations that take a proactive, data-driven approach to benefits design will be better positioned to manage rising claims while supporting employee health and productivity.