Mitigating Rising Medical Costs Around the Globe

Mitigating Rising Medical Costs Around the Globe
December 3, 2025 12 mins

Mitigating Rising Medical Costs Around the Globe

Mitigating Rising Medical Costs Around the Globe

Rising medical costs are a global phenomenon: Aon’s Global Medical Trend Rates Report 2026 found that costs are projected to rise 9.8% in 2026. As employers look to mitigate cost increases, it’s important to understand the drivers behind the medical trend within and across regions.

Key Takeaways
  1. New technology, new medications like GLP-1s and aging populations are driving costs higher, despite the overall trend rate moderating slightly.
  2. The strain on government-provided services has led to an increased demand for private services, driving costs higher in the affected regions.
  3. Organizations have been using many of the same mitigation strategies for a decade, which suggests that customization and flexibility will be important going forward.

A slight reduction in the medical trend rate from 10% in 2025 to a projected 9.8% for 2026 has raised hopes that the rate of increase has begun to at least plateau. Trade factors have kept general inflation higher than anticipated, meaning regions that are dependent on imports are experiencing higher trend rates.

Additionally, factors specific to healthcare, including increased utilization, new technologies and greater demand have kept the trend higher. Aging populations in some regions are further exacerbating cost increases.

Given the medical trend remains high, it’s no surprise that cost management was ranked as the top priority for benefit professionals across all regions in Aon’s 2025 Global Benefits Trends Study. Despite the consistency in risk factors and conditions year-over-year, there are many regional differences to consider when developing cost mitigation plans.

  1. Asia Pacific (APAC)

  2. Europe and the UK

  3. Latin America and the Caribbean (LAC)

  4. Middle East and Africa (MEA)

  5. North America

Asia Pacific (APAC)

2026 Trend Rate: 11.3% (11.1% in 2025)
Top Condition: Cardiovascular (#1 since 2015)
Top Risk Factor: High Blood Pressure (#1 since 2018)
Top Mitigation Strategy: Wellness Initiatives (#1 since 2019)

  • Overview

    Overall inflation has begun to cool in the region, making the rise in trend rate for APAC more remarkable. Several countries, including China, India, the Philippines and Singapore, are predicting a decrease in the trend rate, which is more than offset by rising costs in the rest of the region. An aging population, increased adoption of technology, higher utilization rates and more chronic disease burden are driving the rate higher. Additionally, higher labor costs, specifically in Japan, are increasing overall costs.

  • Controlling Costs in APAC

    APAC is one of only two regions where the medical inflation rate is expected to rise slightly above 2025 levels, reaching 11.3% — 20 basis points higher than last year. This is notable given general inflation across the region is down 40 basis points. The widening of the net medical inflation gap, by 60 basis points to 8.9%, suggests that underlying cost drivers remain strong.

    Around one-third of markets — including China, Singapore, the Philippines and India — are seeing modest decreases in medical inflation rates, helped by a slight decline in utilization and stronger uptake of wellbeing initiatives. But in most other markets across the region, aging populations, chronic disease and advances in medical technology continue to exert upward pressure.

Quote icon

According to our data, many employers are continuing to rely on renewal negotiations to keep costs in check without cutting benefits and putting employee engagement at risk. The use of analytics can help build a strong case for less aggressive premium increases.

Todd Dore
Regional Director, Data and Analytics, Health Solutions, Asia Pacific

Europe and the UK

2026 Trend Rate: 8.2% (8.9% in 2025)
Top Condition: Cardiovascular (#1 since 2015)
Top Risk Factor: High Blood Pressure (#1 since 2015)
Top Mitigation Strategy: Plan Design Change

  • Overview

    As Europe’s largest economy, a large decrease in utilization in the UK — from 17% utilization in 2025 to 12% for 2026 — is helping to drive the reduction in the trend rate in Europe. Several other large economies in the region are reporting decreases as well. While the higher premiums for private healthcare won’t be going down any time soon, it is expected that they will at least level off and remain more consistent.

  • Aging Populations Drive Demand for Private Healthcare

    The limitations on public healthcare systems have been laid bare in recent years, as budgets are squeezed and rising costs continue apace. Combine that with an aging population that requires more care, and the demand for more private healthcare options begins to come into focus. In a recent poll, more than 7 in 10 people in the UK would now consider private healthcare if they needed treatment.1

    Aging was cited as the third biggest risk factor in the region, the highest it ranked in any region.

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We’re seeing a welcome shift from relentless escalation to cautious stabilization. This may be driven by macroeconomics, but also by smarter plan design, targeted wellbeing investments and a commitment to data-driven decision making. Organizations are no longer just reacting to costs; they’re reshaping benefit strategies to deliver value, sustainability and resilience in a changing landscape.

Joana Coelho
Regional Consultant, Health Solutions, Europe, the Middle East and Africa

Latin America and the Caribbean (LAC)

2026 Trend Rate: 10.2% (10.7% in 2025)
Top Condition: Cancer (#1 since 2018)
Top Risk Factor: High Blood Pressure and Obesity (High Blood Pressure #1 since 2015)
Top Mitigation Strategy: Wellness Initiatives (#1 since 2018, excluding 2020)

  • Overview

    The slight decline in trend rate is largely driven by a reduction in the trend rate in Brazil, one of the largest economies of the region, to its lowest level in the last 10 years. The regional trend continues to be high given the continued dependence on imported pharmaceuticals and medical devices, which increases exposure to tariffs and other global macroeconomic factors, and continued adoption of new technologies. As with other regions, the top risk factors and conditions driving the trend rate remained nearly identical, with high blood pressure, obesity and cancer leading the way.

  • Mitigation strategies in LAC

    Mitigation strategies remained consistent in the region. Wellness and cost containment strategies remain the most important; the only change among the top five mitigation strategies is the addition of provider networks. Wellness initiatives are focused on prevention, with annual checkups, mammograms and communications about wellness being the most common. Smoking cessation and back care programs were not reported as effective as in other regions, contributing to higher costs.

    “In Latin America, chronic diseases such as cancer, cardiovascular diseases and diabetes contribute to high medical costs for families, businesses and the healthcare system. Prevention and early detection of these conditions can help reduce expenses by enabling intervention before more complex and costly treatments become necessary,” says Natalia Guarin, M.D., Latin America Wellbeing Leader at Aon.

    For example, effective early management of diabetes can decrease the likelihood of serious complications, such as heart attacks or kidney failure, which often require intensive and expensive treatment.

    Mitigation strategies can also influence economic factors and workplace productivity. Preventive care and prompt diagnoses may result in reduced employee absenteeism due to illness or disability. Similarly, comprehensive care for mental health and musculoskeletal conditions may help minimize disabilities and premature retirement.

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These strategies support broader talent and health goals through aiding workforce retention and business continuity.

Carlos Ferreyra
Head of Advisory and Specialty, Health Solutions, Latin America

Middle East and Africa (MEA)

2026 Trend Rate: 15.3% (15.5% in 2025)
Top Condition: High Blood Pressure (#1 since 2018)
Top Risk Factor: High Blood Pressure (#1 since 2015)
Top Mitigation Strategy: Wellness Initiatives

  • Overview

    A small reduction doesn’t mask the fact that MEA is still the region with the highest overall trend rate. About half the countries in the region are projected to have a flat or slightly decreased trend rate in 2026. That is led by Saudi Arabia, one of the largest economies of the region, where the trend is forecast to decline from 10% to 8%.

    Countries with public healthcare systems are finding their budgets stretched to the limit, driving increased demand for private insurance. Macroeconomic factors like oil prices, the cost of imports and currency fluctuations are also impacting costs, while increased chronic disease burden has also driven costs up.

  • Middle East Specifics

    In the Middle East, although trend rates remain high at more than 15%, the rate of increase is slowing down. There are a few likely reasons for this, including education and support programs for the prevention and management of prevalent diseases and conditions and more targeted wellbeing initiatives.

    Additionally, budget constraints in public systems and macroeconomic pressures may be easing, reducing the upward pressure on the trend. However, increased demand for services was specifically cited in Israel, where government budgets did not increase accordingly, driving demand for more private services.

    “In response to rising healthcare costs, organizations across the Middle East are adopting innovative strategies to manage their employee health benefits effectively,” says Husein Presswala, Executive Director of Aon’s Health Solutions in the Middle East. “Many companies are exploring data-driven approaches to understand utilization patterns and implement targeted interventions.”

    Flexible benefit designs that allow employees to customize their coverage while helping employers control costs are also increasingly popular in the region, says Presswala. Many employers are also turning to brokers to help negotiate more favorable terms with providers and insurers.

  • Africa Specifics

    Reflective of the region’s diversity, the net medical trend rates — defined as medical inflation adjusted for general inflation — show considerable variance across African countries, ranging from –0.4% to 29.8% in 2026. Certain markets are anticipated to experience pronounced double-digit net trend rates, with Ethiopia approaching 30% and higher rates also observed in Malawi and Angola. Conversely, Tanzania and Zambia are forecasted to report the lowest net medical trend rates within the region.

    Medical trend rates are expected to increase in most African countries relative to 2025, with the exception of Ivory Coast, Lesotho, Mauritius, Mozambique, Nigeria, Tanzania and Zambia, where stable or declining trends are anticipated. The year-on-year escalation is particularly marked in Angola and Ethiopia, signaling intensifying inflationary pressures within their healthcare sectors.

  • The Way Forward

    Diabetes, cancer and cardiovascular disease all moved up in prominence in the region, meaning that prevention strategies will become especially important in the years to come. Early detection is important with all these conditions, as the longer treatment waits, the more expensive it tends to be.

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Organizations are leveraging technology, such as telemedicine and digital health platforms, to improve access to care while managing expenses. This strategic approach is helping Middle Eastern businesses maintain competitive benefits packages while effectively mitigating the impact of rising healthcare costs.

Husein Presswala
Executive Director, Health Solutions, Middle East

North America

2026 Trend Rate: 9.3% (8.8% in 2025)
Top Conditions: Cancer, Musculoskeletal
Top Risk Factor: Physical Inactivity
Top Mitigation Strategy: Flexible Benefit Plans to Cap Overall Benefit Costs

  • Overview

    North America is one of two regions with a higher projected trend rate for 2026. The increase of 50 basis points tracks closely with the 40-basis point increase in general inflation. Uncertainty around trade policy makes it challenging to forecast how much costs will rise.

  • Canada Specifics

    The projected trend rate of 8.3% (almost a full percent higher than last year’s increase of 7.4%) is forecasted to be driven largely by increased prescription drug prices. The introduction of generic versions of popular weight loss drugs will offset some, but not all, of the cost increases caused by expanded coverage of the drugs and the increase expected from tariffs on medications imported from the U.S.

    Mitigation strategies remain consistent, with employers looking to optimize existing programs rather than introducing new ones. A renewed focus on physical health initiatives may increase some costs in the near term as those programs are launched, but they should yield future benefits. However, physician shortages may delay health screenings, increasing the risk of more severe conditions and higher claims.

  • United States Specifics

    In the U.S., the medical trend rate tracked exactly with the general inflation rate. GLP-1 medications and other specialty medications continue to drive higher prescription drug costs, which were named as the cost element most responsible for driving the trend rate. Cancer treatments continue to drive significant costs, as new technology and medicines are introduced.

    While flexible benefit plans and wellness initiatives are the main mitigation strategies in the region, another way employers are beginning to mitigate rising costs is to use data and predictive analytics to identify people who are at risk of becoming high-cost claimants. According to Aon’s 2025 Health Survey, these claimants represent only 5% of people, but account for 60% of costs. Organizations can prevent future costs by identifying those at risk for becoming high-cost claimants with programs like early cancer screenings.

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Cancer screenings are one of the most important cost control measures over the next several years, as the cost of high-cost claimants related to cancer treatment continues to grow.

Charles E. Smith, MD
Chief Medical Officer, Health Solutions, North America
Beyond the Medical Trend - Challenge your Cost Strategy

Beyond the Medical Trend - Challenge your Cost Strategy

The focus on out-of-control medical costs has occupied much of the time of benefit professionals. In doing so, it has obscured other ways that employers can find cost savings. By looking at medical costs through a total rewards lens and focusing on personalization and flexibility, employers can realize lower overall costs and improved business outcomes in spite of increases in medical costs.

Contact Us
Aon’s Thought Leaders

Joana Coelho
Regional Consultant, Health Solutions, Europe, the Middle East and Africa

Kathryn Davis
Vice President, Global Benefits

Todd Dore
Regional Director, Data and Analytics, Health Solutions, Asia Pacific

Carlos Ferreyra
Head of Advisory and Specialty, Health Solutions, Latin America

Natalia Guarin
M.D., Wellbeing Leader, Latin America

Husein Presswala
Executive Director, Health Solutions, Middle East

Charles E. Smith, MD
Chief Medical Officer, Health Solutions, North America

1 Going Private 2025 - Headline Findings - Independent Healthcare Provider Network

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This document is not intended to address any specific situation or to provide legal, regulatory, financial, or other advice. While care has been taken in the production of this document, Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the document or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this document. This document has been compiled using information available to us up to its date of publication and is subject to any qualifications made in the document.

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