As tech enables better treatments people want a wraparound healthcare system. That costs money, in training skilled staff, buildings, drugs, specialised machines etc. The impact on healthcare insurance is bound to be a period of premium inflation. Here’s the word;
Global Health insurance costs are projected to rise by over 10% again next year, as healthcare inflation continues to rise following steep cost increases in recent years, according to WTW’s 2026 Global Medical Trends report.
The survey of health insurers found that the average cost of medical health benefits will increase by 10.3% globally next year. This follows rises of 10% in 2025 and 9.5% in 2024. Regionally, the highest cost increases are expected in Asia Pacific at 14% while Latin America is anticipating the sharpest acceleration in costs, from 10.5% this year to 11.9% in 2026.
The Middle East and Africa will also see above average healthcare cost increases at 11.3%, while medical inflation is expected to fall slightly in North America, from 9.4% this year to 9.2% in 2026, and in Europe from 8.3% to 8.2%.
The UK’s healthcare inflation of 10.6% this year and 10% in 2026 is amongst the highest in Western Europe and has been primarily driven by continued pressure on state-funded healthcare services, resulting in higher claims. However, 2025 has so far seen this claims trend stabilise, with rates falling for some conditions.
According to WTW’s research, over half (55%) of insurers surveyed expect further cost increases and for these elevated levels to persist for more than three years, driven by high medical costs, regional pressures on pharmacy and outpatient services and global structural factors.
These include new medical technologies, cited as the top reason for increased costs with three-quarters (74%) of insurers naming it as the primary driver of medical inflation. Followed by the decline of public health systems (52%) and advancements in pharmaceuticals (49%), both of which reflect deeper systemic shifts in healthcare delivery and innovation.
Linda Pham, Global Health and Risk Leader for Integrated and Global Solutions, WTW, said: “Despite variations in healthcare provision in different countries and regions around the world, rising medical costs are a consistent trend for all. One glimmer of hope for employers is that investment in technologies, including AI, is leading to higher costs at the moment but following this phase new technologies are expected to reduce healthcare cost trends in the longer term.”
From a disease-based perspective, cancer is the leading condition driving medical costs globally. It is named as the fastest growing and most expensive diagnosis for insurers in nearly every region, cited by 57% of insurers globally. Three-quarters (75%) of insurers also observed an increase in cancer incidence among individuals under the age of 40.
Cardiovascular conditions (50%) are also growing significantly and rank second among the conditions driving medical claims costs, with behavioural health issues (37%) ranked third.
Kevin Newman, Head of Health and Benefits Europe, WTW, said: “The challenge of navigating healthcare inflation for multinational employers requires strategic management. This can include investing in education for employees on the use of health benefits, raising awareness of prevention programmes for prevalent diseases like cancer, optimising mental health coverage, and introducing flexibility of benefits. Through careful management, employers can make sure they are getting the most out of their healthcare benefits while managing cost inflation.”
It’s concerning to see healthcare costs on the rise again. With the current inflation, I hope this doesn’t lead to increased premiums for families. We need better solutions to manage these expenses!