Despite global annual inflation expected to decrease, medical plan costs on the rise

DUBLIN, Oct. 14, 2024 – Aon plc (NYSE: AON), a leading global professional services firm, forecasts medical plan costs across the world will rise on average 10.0 percent in 2025, according to its 2025 Global Medical Trend Rates Report. This figure is just shy of the projected increase for 2024 of 10.1 percent, which represented the highest increase forecasted in 10 years.

The medical trend rate represents the percentage increases in medical plan unit costs – insured and self-insured – required to address projected price inflation, technology advances in the medical field, plan utilization patterns and cost shifting from social programs. The report includes trend data from 112 countries and locations worldwide.  

This year’s report projects Middle East and Africa (MEA) to have the highest trend rate of any region at 15.5 percent. Asia-Pacific (APAC) and North America will experience the highest year-over-year trend rate increases at 11.1 percent and 8.8 percent, respectively. Aon expects Latin America and the Caribbean (LAC) and Europe trend rates to increase by 10.7 percent and 8.9, respectively, which are smaller than the projections for 2024 in both regions.

“Despite inflation projected to decrease in 2025, we expect health and wellbeing costs will continue to rise. As a result, medical plans are an important concern for companies, especially those with a global footprint,” said Kathryn Davis, vice president of global benefits at Aon. “Rising costs often bring unexpected budget increases and makes affordability for employers and employees more difficult.”

The top medical conditions expected to drive increases in the trend rate in 2025 are:

1. Cardiovascular Diseases: Cardiovascular diseases, including disorders of the heart and blood vessels, are now the top medical condition anticipated to drive plan costs in 2025. They’ve been a top condition in every region, with over 25 countries reporting the diseases as the most impactful condition.
2. Cancer and Tumor Growth: Down from its place as the leading condition last year, cancer and tumor growth is still a top five condition in every region with 21 countries reporting it as the most impactful condition.
3. High Blood Pressure and Hypertension: Considered a leading risk factor for other conditions, high blood pressure and hypertension is consistently reported as the top condition driving adverse claims experiences in MEA and increasingly in LATAM, with 16 countries reporting it as the most impactful condition.

In 2025, obesity emerged as another top global risk factor expected to drive future claims, driven by its prevalence in the U.S., Canada and LAC. This is particularly relevant as many countries cited prescription drugs used for weight loss as leading factors in increasing the trend rate.

“As employer-sponsored medical plans become a larger part of total rewards spend, we are seeing businesses leverage trend rate data to inform their budgets and benefits strategies,” Davis added. “Wellbeing initiatives are again the leading mitigation strategy as they help to control costs by encouraging utilization of preventative care and by keeping employees engaged in their wellbeing.”

Aon conducted the survey across 112 countries and locations that broker, administer or advise on employer-sponsored medical plans in each of the countries covered in this report. The survey responses reflect the medical trend rate expectations of Aon professionals based on their interactions with clients and carriers represented in the portfolio of the firm’s medical plan business in each location.

Read Aon’s 2025 Global Medical Trend Rate Report here.

About Aon
Aon plc (NYSE: AON) exists to shape decisions for the better — to protect and enrich the lives of people around the world. Through actionable analytic insight, globally integrated Risk Capital and Human Capital expertise, and locally relevant solutions, our colleagues provide clients in over 120 countries with the clarity and confidence to make better risk and people decisions that protect and grow their businesses.

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