Global Medical Trend Rates Analysis: 2026 Projections and Strategic Implications for Employer-Sponsored Health Plans

In this iPMI Global Insights article we read and analyse the Aon 2026 Global Medical Trend Rates Report, which surveys over a hundred Aon locations to predict the annual percentage increase in the cost of healthcare services. The report highlights that the global average medical trend rate is expected to be 9.8% in 2026, marking a slight decline from the previous year, yet persistent high costs are attributed to factors like utilization rates, new technology adoption, and aging populations.

Regional variations are noted, with Asia-Pacific and the Middle East & Africa facing the highest trend rates, and the report also details how GLP-1 drugs for diabetes and weight loss are significantly impacting medical costs globally. Finally, the report summarizes the cost containment strategies employers are using, such as negotiating with vendors and implementing wellbeing initiatives, to mitigate these rising expenses.

1.0 The Global Healthcare Insurance Cost Landscape for 2026

For multinational employers, navigating the future of healthcare costs requires a clear understanding of the distinction between medical cost and medical trend. While medical cost represents the current baseline expense, medical trend is the predicted annual percentage increase in that cost. This forward-looking metric is the primary tool for multinational employers to accurately forecast budget requirements, model the impact of plan design changes, and manage financial risk in their global benefits portfolio. Crucially, a declining trend signifies a slowdown in the rate of cost growth, not an actual decrease in expenses; costs only fall if the trend becomes negative.

The headline projection for 2026 indicates a global average medical trend rate of 9.8%. This figure is significant as it marks a return to a single digit increase for the first time since 2023, signalling a potential stabilization after a period of higher volatility.

This global rate is shaped by a complex interplay of dual pressures. On the macroeconomic front, persistent economic and geopolitical uncertainty, newly announced global tariffs, regional inflation, and currency fluctuations create a challenging environment. Simultaneously, healthcare-specific factors exert their own upward pressure, including higher utilization of services, the adoption of new medical technologies, a growing demand for private care, and the demographic reality of aging populations.

To develop effective, localized strategies, it is essential to move beyond this global average and examine the distinct trends unfolding at a more granular, regional level.

2.0 Comparative Regional Analysis of 2026 Medical Trend Rates

While the global average provides a useful benchmark, it masks significant variations in the healthcare cost pressures experienced across different parts of the world. For multinational employers, a deep dive into these regional differences is crucial for tailoring benefits strategies that are both cost-effective and competitive in local markets.

The following table summarizes the projected gross medical trend rates for 2026, compared to 2025, across the world's major regions.

2.1 North America: Inflationary Pressures Drive Continued Cost Escalation

North America's gross medical trend is projected to increase to 9.3%, making it one of only two regions with an anticipated rate higher than in 2025. While many factors contribute to cost escalation in the United States and Canada, it is particularly notable that the medical trend rate in the region has moved almost exactly in tandem with the general inflation rate, underscoring the strong link between broader economic conditions and healthcare costs.

2.2 Asia-Pacific (APAC): A Divergent Landscape with Accelerating Net Costs

The APAC region is also projected to see its gross medical trend rate rise, reaching 11.3%. This average, however, conceals a divergent landscape. Approximately one-third of APAC markets, including China and Singapore, expect a decrease in their trend rates due to moderated utilization. In contrast, the remaining two-thirds face significant upward pressure from aging populations, a growing chronic disease burden, and the rapid adoption of advanced medical technologies. As general inflation in the region cools, the impact of these healthcare-specific drivers is amplified; consequently, the increase in the net medical trend rate is much higher at 60bps (8.9% vs. 8.3%).

2.3 Europe: General Moderation Masks Pressure on Public Systems

Europe is expected to see its gross medical trend rate decline to 8.2%, a moderation largely attributable to declining general inflation. The most notable decrease is the 5% reduction in the UK, as the post-pandemic surge in healthcare utilization flattens. This suggests that while increased premiums are not expected to subside, they will remain more stable. However, other European countries face countervailing pressures, including increased demand for private healthcare services as a direct result of significant limitations and wait times within public systems, a challenge exacerbated by aging demographics.

2.4 Latin America & Caribbean (LAC): Slight Moderation Amidst Persistent High-Cost Drivers

The projected gross medical trend rate for the Latin America and Caribbean region shows a slight decline to 10.3%. This moderation is largely driven by changing patterns of care in major economies like Brazil and Colombia, which are helping to alleviate some pressure from high-priced hospitalizations. Despite this easing, the trend remains elevated compared to historical averages. Persistent drivers keeping the rate high include the introduction of advanced medical technologies and a heavy dependence on imported pharmaceuticals.

2.5 Middle East & Africa (MEA): Diverse Trends and Rising Net Costs

The MEA region presents a highly varied landscape. While the projected gross medical trend rate is expected to decline slightly to 15.3% due to cooling inflation, the net trend rate is actually higher than the previous year, rising from 7.3% in 2025 to 7.6% in 2026. Projections vary significantly by market, decreasing in countries like Saudi Arabia while remaining stable or increasing in others, such as Nigeria. Key drivers for cost increases include rising demand for healthcare, dependence on imports vulnerable to currency depreciation, and a substantial chronic disease burden.

While these regional trend rates reveal where costs are rising, a deeper analysis of the underlying clinical conditions is required to understand why.

3.0 The Clinical Drivers: Profiling Top Conditions and Risk Factors

A strategic approach to managing healthcare costs requires looking beyond trend rates to understand the specific medical conditions and underlying risk factors that generate the majority of plan claims. This knowledge is foundational for designing targeted wellbeing programs and cost-containment initiatives that address the root causes of spending.

The top five medical conditions expected to drive medical plan costs globally in 2026 remain largely consistent with prior years, with one notable new entrant.

Cardiovascular: Disorders of the heart and blood vessels remain the single largest driver of medical plan costs globally, with the most significant impact in the Asia-Pacific, Europe, and Latin America & Caribbean regions.

Cancer/Tumour Growth: As the second leading condition, cancer is a top five cost driver in every region worldwide, reflecting its widespread and high-cost impact on health plans.

High Blood Pressure/Hypertension: A major condition in its own right, hypertension is a leading cause of adverse claims, particularly in the Middle East & Africa, Latin America & Caribbean, and Europe.

Diabetes: This metabolic condition ranks as the fourth major driver of medical costs, with a rising prevalence in many parts of the world.

Musculoskeletal: Reflecting a large and growing portion of the population struggling with issues related to muscles, bones, and joints, musculoskeletal conditions have entered the top five cost drivers for the first time.

These conditions are often downstream consequences of a handful of primary risk factors. The top four are:

• Hypertension: The leading risk factor by a wide margin, contributing to cardiovascular disease and other major conditions.
• Physical Inactivity
• Poor Nutrition
• Obesity: The prominence of obesity as a risk factor continues to rise, a trend with significant implications for future costs.

The direct line from risk factors like Poor Nutrition and Obesity to top cost-driving conditions such as Diabetes and Cardiovascular disease underscores the long-term financial imperative of investing in preventative employee wellbeing. This convergence has set the stage for a powerful new cost trend: the global rise of GLP-1 therapies.

4.0 Spotlight on an Emerging Cost Driver: The Global Rise of GLP-1 Therapies

The emergence of GLP-1 agonists represents one of the most critical issues for employer-sponsored health plans. Their substantial impact on medical costs stems from the convergence of three major global health trends, creating a perfect storm for plan sponsors.

Diabetes is the fourth major condition driving plan costs globally.

Poor nutrition and Obesity are top five global risk factors that directly contribute to the prevalence of diabetes.

Prescription Drugs have become the third costliest element of medical plans worldwide.

The impact of GLP-1s on medical trend rates is already significant. These drugs can be attributed to an average of 10% of the medical trend rate in many countries, rising as high as 25% in some markets. Employer coverage approaches vary widely; for instance, plans in countries like China and Malaysia often cover these drugs for diagnosed diabetes but exclude coverage for weight loss, mitigating but not eliminating the cost impact.

The effect of these therapies is being felt in markets around the world:

Netherlands: The total cost for diabetes medication amounted to €392 million, a rise of 15% in one year due to more users of SGLT2 inhibitors and GLP-1 agonists.

Canada: The introduction of generic versions of these weight-loss drugs, expected in 2026, is anticipated to help offset the financial impact of expanded coverage.

Puerto Rico: GLP-1s are having a significant impact on overall prescription drug costs, with antidiabetic medications now ranking among the top five drugs by total expense.

United States: Prescription drug costs continue to climb, driven by increased utilization of high-cost specialty therapies, including GLP-1s.

While GLP-1s represent a significant therapeutic advance, they also present a major financial challenge. This duality forces employers to carefully consider how they and other cost pressures are addressed within their benefits strategy.

5.0 Leading Employer Strategies for Mitigating Healthcare Costs

In an environment of sustained economic uncertainty, cost management has become the primary strategic priority for 70% of companies. Leading employers are not merely reacting to these pressures but are deploying a strategic playbook of levers to control rising benefit costs while continuing to support employee wellbeing.

5.1 Primary Focus: Vendor Negotiations

The most common and immediate actions involve vendor partners. To secure more favourable terms, approximately three-quarters of companies plan to conduct hard negotiations with existing carriers and vendors. In parallel, about two-thirds plan to test the market by putting their plans out to request for proposal (RFP).

5.2 Leading Initiative: Wellbeing Programs

Wellbeing initiatives have emerged as the leading cost mitigation strategy, reported by 86% of countries. These programs offer a powerful dual benefit: encouraging preventative care to avoid future expensive claims and reducing the stress that can exacerbate other health conditions.

5.3 Key Cost-Containment Mechanisms

Alongside negotiations and wellbeing, employers are adopting a range of plan design and cost-containment mechanisms to manage expenses more effectively.

Flexible Benefit Plans: Now the third most prevalent mechanism globally, driven by growth in APAC, these plans provide employers with greater cost control while enabling behavioural change by giving employees choice and ownership over their benefits.

Cost-Containment Measures: Traditional measures aimed at controlling overuse remain important. These include raising deductibles, copays, and requiring referrals for specialist care.

Virtual Services: Employers are increasingly partnering with providers to offer virtual care for telehealth, mental wellbeing support, and physiotherapy to deliver quality care at a lower cost.

Other Plan Design Changes: Other strategies being implemented include increasing employee cost-sharing, reducing less-valued benefits, and changing eligibility rules.

Successfully navigating the complexities of the 2026 healthcare landscape demands a proactive, multi-faceted, and data-driven strategy to ensure both the fiscal sustainability of benefits programs and the health of a productive workforce.