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Medical costs across Asia-Pacific are expected to increase by 9.7% in 2027, down from 11.3% in 2026, according to Aon’s 2027 Global Medical Trend Rates Report, although healthcare expenses are projected to continue rising significantly faster than general inflation.
The forecast from Aon indicates that the region’s medical trend rate will remain well above projected consumer price inflation of 2.5%.
- Aon forecasts medical costs in Asia-Pacific will increase by 9.7% in 2027, compared with 11.3% in 2026, while global medical cost growth is expected to slow to 9%.
- Kazakhstan is projected to record the region’s highest medical trend rate at 32%, followed by Pakistan at 24.4% and Indonesia at 17.3%.
- Wellness initiatives remain the leading cost management strategy, with 95% of employers expected to use them, followed by benefits plan redesign at 70% and cost containment strategies at 65%.
After accounting for general inflation, the net medical trend rate is expected to decline from 8.9% in 2026 to 7.2% in 2027.
Globally, medical cost growth is projected to moderate from 9.8% in 2026 to 9.0% in 2027, leaving Asia-Pacific above the worldwide average.
The projections, dated October 12, 2026, reflect continued pressure on employers and insurers financing medical benefit programs, even as the overall pace of healthcare cost increases begins to ease.
“While medical trend growth is slowing, it remains more than three times the rate of inflation,” said Tim Dwyer, Head of Human Capital, Asia Pacific, at Aon. “Employers need to manage rising costs while protecting the value of employee benefits.”
Dwyer said organizations should use workforce and claims data to assess plan design, healthcare provider networks and financing arrangements to achieve better cost outcomes.
Medical cost inflation varies sharply across Asia-Pacific
The regional slowdown is being driven largely by China and India, where projected medical cost growth is moderating.
- China’s medical trend rate is expected to decline from 7.8% in 2026 to 6.0% in 2027, a reduction of 1.8 percentage points.
- India’s rate is forecast to fall from 11.5% to 10.1%, a decrease of 1.4 percentage points.
- Other markets expected to experience slower medical cost growth include Australia, Malaysia, New Zealand, the Philippines, South Korea, Thailand and Vietnam.
However, five of these seven markets are still projected to record double-digit medical trend rates in 2027.
New Zealand’s rate is expected to decline from 18% to 14%, while Thailand is forecast to moderate from 14.8% to 11.7%. The Philippines is projected to experience a reduction from 14% to 11%, and Malaysia’s rate is expected to fall from 16% to 14.7%. Singapore and Taiwan are moving in the opposite direction.
Singapore’s medical trend rate is projected to increase from 13% to 14.7%, while Taiwan’s is expected to rise from 8% to 10%. Hong Kong’s rate is forecast to remain unchanged at 9%.
Across the wider region, Kazakhstan is expected to record the highest medical trend rate at 32%, up from 29% in 2026. Pakistan follows at 24.4%, compared with 23.5% in 2026, while Indonesia’s medical trend is projected to increase from 16.9% to 17.3%.
Japan remains among the lowest-cost-growth markets, with a projected medical trend rate of 3.1%, compared with 2.7% in 2026.
“The moderation in the region’s medical costs should not be interpreted as uniform relief for employers,” said Alan Oates, Head of Global Benefits, Asia Pacific, at Aon.
He emphasized that medical costs depend on different healthcare systems, supply and demand conditions, demographic trends and patterns of disease.
Aon medical trend forecasts by Asia-Pacific market
The following table compares gross medical trend rates for 2026 and 2027, alongside projected 2027 general inflation and net medical trend rates.
| Market | 2026 medical trend | 2027 medical trend | 2027 net trend |
|---|---|---|---|
| Asia-Pacific | 11.3% | 9.7% | 7.2% |
| Australia | 5.2% | 4.9% | 1.7% |
| Bangladesh | 10.0% | 10.0% | 4.0% |
| China | 7.8% | 6.0% | 4.5% |
| Hong Kong | 9.0% | 9.0% | 7.2% |
| India | 11.5% | 10.1% | 6.1% |
| Indonesia | 16.9% | 17.3% | 14.7% |
| Japan | 2.7% | 3.1% | 0.8% |
| Kazakhstan | 29.0% | 32.0% | 21.9% |
| Malaysia | 16.0% | 14.7% | 12.7% |
| Mongolia | N/A | 10.0% | 2.8% |
| New Zealand | 18.0% | 14.0% | 11.7% |
| Pakistan | 23.5% | 24.4% | 16.0% |
| Papua New Guinea | 15.0% | 5.0% | 0.6% |
| Philippines | 14.0% | 11.0% | 7.8% |
| Singapore | 13.0% | 14.7% | 12.8% |
| South Korea | 11.5% | 10.5% | 8.6% |
| Sri Lanka | 6.5% | 14.3% | N/A |
| Taiwan | 8.0% | 10.0% | 8.4% |
| Thailand | 14.8% | 11.7% | 10.7% |
| Vietnam | 12.2% | 9.9% | 5.3% |
Source: Aon, 2027 Global Medical Trend Rates Report. Projections as of October 12, 2026. Net medical trend represents projected medical cost growth after accounting for general inflation.
Chronic diseases and hospital costs drive medical insurance claims
Aon’s report identifies cardiovascular disease as the leading medical condition contributing to healthcare claims across Asia-Pacific.
Ear, nose, throat, lung and respiratory conditions rank second, followed by cancer and tumor-related conditions. Gastrointestinal disorders, musculoskeletal conditions and back problems are also becoming increasingly prevalent.
Hospitalization remains one of the largest components of medical benefit expenditure, alongside clinics and laboratory services.
Prescription medication has moved into third place among the most costly elements of medical plans compared with the previous year’s findings, underlining the increasing importance of pharmaceutical spending in healthcare cost management.
The report also identifies several health risk factors expected to contribute to future claims growth.
High blood pressure, physical inactivity and poor nutrition remain the principal concerns, while high cholesterol and elevated blood glucose levels are becoming more prevalent.
Ageing populations and a rising burden of chronic disease are expected to increase healthcare utilization across several markets, sustaining pressure on insurers and employers.
The combination of changing demographics and growing demand for treatment helps explain why medical cost trends remain substantially above general inflation despite the expected slowdown in 2027.
Employers prioritize wellness programs and benefits redesign
Employers across Asia-Pacific are expected to continue adapting their health insurance and employee benefits strategies in response to higher medical spending.
According to Aon, wellness initiatives remain the most widely anticipated approach to managing medical plan costs, ranking first for the third consecutive year.
Approximately 95% of employers are expected to use wellness programs in 2027. Benefits plan design changes rank second, with 70% of employers expected to adopt this approach. Cost containment and financing strategies follow at 65%.
Meanwhile, 55% of employers are expected to implement access and delivery restrictions, and the same proportion are expected to use flexible benefits plans to manage costs and support workforce health.
The prevalence of flexible benefit plans has increased by 10 percentage points over the past two years, indicating greater employer interest in adapting benefits to workforce needs while managing overall expenditure.
Aon also highlighted growing differences between insurers in their adoption of technology to monitor healthcare utilization and improve cost management.
Oates said employers should evaluate insurers’ developing capabilities alongside workforce data, local market benchmarks and healthcare delivery conditions when designing benefit programs.
The findings indicate that slower regional medical inflation will provide some moderation in cost growth, but employers are still likely to face substantial increases in healthcare benefit expenditure during 2027.
With significant differences between national markets, Aon recommends that companies evaluate their own claims experience and local healthcare conditions rather than relying exclusively on regional medical trend averages.
