Medical costs in the Asia Pacific (APAC) region are expected to increase by 9.7% in 2027, a decrease from 11.3% in 2026, according to Aon’s 2027 Global Medical Trend Rates Report. Despite the slowdown, the growth rate remains significantly higher than the forecasted general inflation rate of 2.5% in the region. Tim Dwyer, Head of Human Capital Asia Pacific at Aon, highlighted the need for employers to manage rising costs whilst maintaining employee benefits.
The report indicates that cardiovascular disease, respiratory disorders, and cancer continue to drive medical claims. The projected decline in medical trend rates is largely attributed to reductions in China and India, with decreases of 1.8 and 1.4 percentage points, respectively. However, Singapore and Taiwan are expected to see higher trend rates, whilst Hong Kong remains stable at 9%.
Alan Oates, Head of Global Benefits Asia Pacific at Aon, noted that medical trends vary significantly across markets due to differing healthcare systems and demographic patterns. Employers are encouraged to analyse workforce data and market benchmarks to make informed decisions about benefits design.
The report also identifies wellness initiatives as a primary strategy for managing rising medical costs, with 95% of employers expected to adopt this approach. Plan design changes and cost containment strategies are also prevalent, with flexible benefit plans gaining traction over the past two years.
Aon’s report is based on insights from over 100 offices advising on employer-sponsored medical plans, reflecting the anticipated annual percentage increase in healthcare costs.
