Aon's 2027 Global Medical Trend Rates report, projects that medical costs in Asia Pacific will increase by 9.7% in 2027, compared with 11.3% in 2026.
The projected medical trend rate remains substantially above the forecast for APAC general inflation rate of 2.5%. After accounting for inflation, the net medical trend rate is expected to decline from 8.9% in 2026 to 7.2% in 2027. Globally, the medical trend rate for 2027 is projected to decrease from 9.8% in 2026 to 9.0% in 2027.
Medical cost trends vary across APAC markets
The outlook varies considerably across markets. The decline in the regional trend rate is driven largely by China and India, which are projected to see medical trend rates decrease by 1.8 and 1.4 percentage points, respectively. Medical trend rates are also expected to moderate in Australia, Malaysia, New Zealand, Philippines, South Korea, Thailand and Vietnam, although five of those markets are still projected to record double-digit trend rates in 2027.
These declines are partly offset by higher projected trend rates in Singapore and Taiwan, while Hong Kong is expected to remain flat at 9%. Across the region, ageing populations and the growing prevalence of chronic conditions continue to influence healthcare utilisation and costs.
Chronic conditions continue to drive claims
Cardiovascular disease remains the leading condition driving medical claims in the region, followed by ENT/lung and respiratory diseases, and cancer or tumour growth. Hospitalisation, clinics and laboratories remain the costliest elements of medical plan costs, while prescription medication has moved into third place compared to last year. Gastrointestinal, musculoskeletal and back conditions are also becoming more prevalent in the region.
In APAC, the principal risk factors contributing to future claims are high blood pressure, physical inactivity and poor nutrition, while high cholesterol and blood glucose are also increasing in prevalence.
Wellness initiatives remain the most widely expected approach to managing rising medical plan costs in the region, retaining the top rank for the third consecutive year with 95% of employers expected to use this approach. Plan design changes ranked second at 70%, followed by cost containment and financing strategies at 65%. Fifty five percent of employers are expected to undertake access and delivery restrictions and flexible benefit plans to curb medical cost escalation and promote a healthy workforce.
While both increased slightly over the past year, the prevalence of flexible benefit plans has risen by 10 percentage points over the past two years, indicating the emphasis that employers are placing on flexible benefits on managing overall costs.
The report is based on insights from over 100 Aon offices that broker, administer or advise on employer-sponsored medical plans.