The employee medical plan costs in India are expected to rise by 11.5 per cent in 2026, down from 13 per cent projected for 2025
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NEW DELHI — The employee medical plan costs in India are expected to rise by 11.5 per cent in 2026, down from 13 per cent projected for 2025, according to a report on Thursday.
The report by global professional services firm Aon showed that this moderation signals a stabilisation after two years of sharp increases. It also aligns with a broader trend across the Asia Pacific, where the average medical trend rate is expected to be 11.3 per cent.
Medical trend rates represent the annual percentage increase in medical plan costs per employee, both insured and self-insured. These figures help organisations budget and adapt their benefits strategies to ensure sustainability in a rapidly evolving healthcare landscape.
The country’s medical trend rate remains above the global average of 9.8 per cent, but the pace of growth is slowing due to moderated utilisation.
Notably, the report showed that cardiovascular diseases, gastrointestinal conditions, and cancer will continue to be the top drivers of medical costs, with hypertension, high cholesterol, and poor nutrition as leading risk factors.
“India’s healthcare landscape is evolving, with employers increasingly adopting flexible benefit plans, cost containment strategies, and wellbeing programmes to manage rising costs,” said Ashley D’Silva, head of Health Solutions, India at Aon.
“By leveraging data and partnering with insurers, businesses can better anticipate risks and support a healthier, more productive workforce,” D’Silva added.
The trends impacting medical trend rate in India include advanced prescription and specialty medications, innovations in medical technology, particularly biologics, and upward pressure from chronic disease burden, increased healthcare utilisation, and adoption of technological advancements.
Shortage of quality infrastructure and skilled professionals also contributes to higher medical service costs, making healthcare less accessible. Rising insurance premiums, fueled by higher claims and escalating medical expenses, are further exacerbating the issue.
Further, the report highlighted that employers in India are placing greater emphasis on flexible benefits plans that allow employees to tailor their healthcare options to better suit their individual needs.
They are also adopting data-driven cost-containment strategies, leveraging analytics to optimise healthcare spending and achieve improved outcomes.
The report recommended businesses invest in preventive wellbeing strategies and prioritise real impact over traditional approaches, as the medical insurance market in India is transitioning into a new phase.