Global Medical Trend Rate Projections 2025

In the iPMI Global in Focus Cost Containment article we take a look at Aon's 2025 Global Medical Trend Rates Report.

The report analyses projected medical cost increases for employer-sponsored plans across various regions. The report anticipates a continued double-digit global medical trend, driven by factors such as inflation, technology advancements, and regional healthcare demands. Cardiovascular diseases are identified as a leading cost driver, while obesity emerges as a top risk factor globally. Employers are exploring strategies like well being initiatives, cost containment, and flexible benefit plans to mitigate rising expenses. Regional variations are noted, with Asia-Pacific and North America expecting higher increases, while Europe and Latin America may see decreases.

Key Themes

• Double-digit global medical trend continues: The global average medical trend rate for 2025 is projected at 10.0%, marginally down from 10.1% in 2024. This marks the second consecutive year of double-digit increases, fuelled by a complex interplay of macroeconomic factors and regional trends.
• Regional variation in trend changes: Unlike previous years where trend changes behaved similarly across regions, 2025 sees significant variation:
• Asia-Pacific (APAC) and North America project the highest increases compared to 2024, reaching 11.1% and 8.8% respectively. APAC's surge is driven by dramatic increases in markets like New Zealand, Papua New Guinea, Thailand, and Vietnam.
• Europe and Latin America & the Caribbean (LAC) are experiencing a decrease in trend rates, benefiting from lower annual general inflation. Europe's trend is projected at 8.9%, down from 10.4% in 2024.
• Middle East & Africa (MEA) is the only region with a projected increase in both general inflation and medical trend rate, reaching 15.5%. However, the medical trend increase is only half that of inflation, resulting in a decrease in the medical trend rate net of inflation.
• Leading medical conditions driving costs: Cardiovascular diseases have overtaken cancer/tumour growth as the top cost driver in 2025, significantly impacting claims in APAC, Europe, and LAC.
• High blood pressure/hypertension remains a major concern, particularly in MEA and increasingly in LAC. It is also a leading risk factor for other conditions.
• Risk factors: Hypertension is the leading risk factor, while physical inactivity and poor stress management remain prominent.
• Obesity emerges as a top five global risk factor, fuelled by its prevalence in North America and LAC, and the increasing use of weight-loss prescription drugs.
• Prescription drugs driving cost increases: GLP-1 medications for weight loss are specifically mentioned as a significant cost driver in the US, Canada, UAE, and Puerto Rico.
• Specialty drugs continue to be a major cost factor in the US despite low utilization.
• Employer mitigation strategies: Wellbeing initiatives are the leading strategy, aiming to encourage preventative care and employee wellbeing to reduce long-term costs.
• Cost containment measures like increased deductibles and copays, as well as utilization management tools like referrals, are expected to play a key role.
• Flexible benefit plans are gaining traction globally, allowing employers more cost control and supporting diverse employee needs.
• Data analysis of health and disability claims is increasingly prioritized to inform targeted interventions.

Global Medical Trend Rate Projections 2025 FAQs

1. What is the projected global medical trend rate for 2025?

The global average medical trend rate for 2025 is projected to be 10.0%, nearly the same as the 10.1% projected for 2024. This marks the second consecutive year of double-digit medical trend increases.

2. Which regions have the highest projected medical trend rate increases in 2025?

Asia-Pacific (APAC) and North America are the regions with the highest projected medical trend rate increases compared to 2024. APAC is expected to experience an 11.1% increase, while North America anticipates an 8.8% increase.

3. What are the top medical conditions driving medical plan costs in 2025?

The top three medical conditions anticipated to drive plan costs in 2025 are:

Cardiovascular Diseases: This includes disorders of the heart and blood vessels and has become the top concern in most regions globally.

Cancer/Tumour Growth: While dropping from the leading position in 2024, cancer remains a significant cost driver in all regions.

High Blood Pressure/Hypertension: This condition is a major risk factor for other illnesses and continues to heavily impact claims experience, especially in the Middle East and Africa and increasingly in Latin America and the Caribbean.

4. What risk factors contribute most to these leading conditions?

Hypertension is not only a leading condition itself but also a significant risk factor for other conditions. Other major risk factors include physical inactivity, poor stress management, and increasingly, obesity.

5. How are prescription drug trends impacting the medical trend rate?

Specialty drugs, particularly GLP-1 medications for weight loss, are contributing significantly to the rising medical trend rate in several regions, including the United States, Canada, the United Arab Emirates, and Puerto Rico.

6. What are employers doing to mitigate the rising medical costs?

Employers are using several strategies to mitigate rising costs, including:

Wellbeing initiatives: These programs encourage preventative care and employee engagement in their health.

Cost containment measures: These include raising deductibles and copays and utilizing referrals to control overuse of services.

Plan design changes: This involves implementing flexible benefit plans, access restrictions, and delivery restrictions to incentivize cost-effective care.

7. Are there any regional differences in how employers are mitigating costs?

Flexible benefit plans are gaining global traction, with about 60% of countries expected to use them in 2025. They offer employers more cost control and can influence employee behaviour toward more cost-effective healthcare choices.

8. Where can I find more detailed information on specific countries or regions?

The full Aon 2025 Global Medical Trend Rates Report includes detailed regional and country-specific data. You can contact Aon directly for further assistance in understanding the report and its implications.

iPMI Global CEO Christopher Knight concludes, “This report emphasizes the complex and evolving landscape of global medical trends. Employers must remain proactive in understanding regional nuances, key cost drivers, and emerging risks to develop effective cost management strategies and ensure the long-term sustainability of their benefits programs.”

To download the Aon 2025 Global Medical Trend Rates Report, click here.