Aon report predicts global average medical trend rate to be 10% in 2025
Employers are implementing various measures to mitigate the rising costs of medical plans worldwide, with wellbeing initiatives taking the lead, according to a new whitepaper from Aon.
The paper, which covered 112 locations across the world, found that the global average medical trend rate for 2025 is expected to be 10.0%.
The highest projected increase was logged in the Asia-Pacific region with 11.1%, up by 1.4% from 2024, according to Aon.
"In APAC, the increase in trend is being driven by 50 to 100+ per cent increases in trend rates versus last year in a few markets, namely New Zealand, Papua New Guinea, Thailand, and Vietnam," the report read.
To address the rising costs, Aon said wellbeing initiatives are "again the leading mitigation strategy."
"These initiatives help to control costs in a couple of ways: by encouraging utilisation of preventative care, they can avoid more expensive care down the road; and by keeping employees engaged in their wellbeing, they can reduce the stress that can exacerbate other health conditions," the report read.
Employers are also implementing flexible benefit plans to mitigate costs, according to the report.
"Apart from allowing employers a greater deal of cost control, flexible benefit plans often serve as an enabler of change in employees' behaviour," the report read.
"These plans also work as a tool to deliver differentiated benefit packages that can attract and retain talent, while also offering adaptive benefits to meet individual needs and address company policies around diversity, equity, inclusion and belonging (DEIB) (which was cited by 60% of global companies as a critical trend)."
It further noted that cost containment measures aimed at reducing or controlling overuse, such as raising deductibles and copays and the use of referrals, are also expected to play an important role in 2025.
"More significant plan design changes — such as the use of flexible benefit plans to cap overall benefit costs, and access and delivery restrictions — are all measures designed to incentivise plan members to seek care in a cost-effective manner and are also expected to also continue to play a role in 2025," the report read.
Read more about the surging medical trend rates in this whitepaper from Aon.
