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Aon predicts an average increase in medical care costs of 10 percent worldwide by 2025

Aon predicts an average increase in medical care costs of 10 percent worldwide by 2025

Aon predicts an average increase in medical care costs of 10 percent worldwide by 2025

Although global annual inflation is expected to decline, health insurance costs are rising

DUBLIN, October 14, 2024 – Aon plc (NYSE: AON), a leading global professional services company, predicts that global medical care costs will increase by an average of 10.0 percent in 2025, according to its 2025 Global Medical Trend Rates Report. This figure is just shy of the 10.1 percent forecast increase for 2024, which is the highest forecast increase in 10 years.

The medical trend rate represents the percentage increase in costs per health plan (insured and self-insured) required to address projected price inflation, medical technological advances, plan utilization patterns, and cost shifts from social programs. The report includes trend data from 112 countries and locations worldwide.

This year’s report predicts that the Middle East and Africa (MEA) will have the highest trend rate of all regions at 15.5 percent. Asia Pacific (APAC) and North America will see the highest trend rate increases at 11.1 percent and 8.8 percent year-over-year, respectively. Aon expects trend rates in Latin America and the Caribbean (LAC) and Europe to increase by 10.7 percent and 8.9 percent, respectively, lower than 2024 forecasts in both regions.











Predicted medical trend rate from 2024 to 2025

2024

2025

Global

10.1%

10.0%

North America

7.6%

8.8%

Asia Pacific

9.7%

11.1%

Europe

10.4%

8.9%

Latin America and the Caribbean

11.7%

10.7%

Middle East and Africa

15.1%

15.5%

“Although inflation is expected to fall in 2025, we expect the cost of health and wellbeing to 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 lead to unexpected budget increases and make affordability difficult for employers and employees.”

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

  1. Cardiovascular diseases: Cardiovascular disease, including diseases of the heart and blood vessels, is now the highest-impact disease, expected to drive up health insurance costs in 2025. They are among the top diseases in all regions, with over 25 countries reporting these diseases as the most serious diseases.

  2. Cancer and tumor growth: Cancer and tumor growth ceased to be the most common disease last year and is still among the top five diseases across all regions, with 21 countries citing it as the most serious disease.

  3. High blood pressure and hypertension: Hypertension and high blood pressure are considered a major risk factor for other diseases and are consistently reported as the leading cause of adverse outcomes in MEA and increasingly in LATAM, with 16 countries reporting it as the most serious condition.

In 2025, obesity emerged as another global risk factor expected to result in future claims, reflecting its prevalence in the US, Canada and LAC. This is particularly relevant as many countries cited prescription weight loss medications as major factors in increasing the trend rate.

“As employer-sponsored health insurance accounts for an increasingly larger portion of overall premium spending, we are seeing companies use trend rate data to inform their budgets and benefits strategies,” Davis added. “Wellbeing initiatives are again the most important mitigation strategy as they help control costs by encouraging uptake of preventive measures and engaging employees in their well-being.”

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

Read Aon’s Global Medical Trend Rate Report 2025 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 analytical insights, globally integrated venture 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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