Medical costs in India projected to rise 10.1pc in 2027: Aon
Medical costs in India are projected to rise 10.1 per cent in 2027, down from 11.5 per cent in 2026, according to Aon. Chronic diseases, rising healthcare demand and advanced treatments will continue to pressure employer benefit budgets
New Delhi: Medical costs in India are expected to rise 10.1 per cent in 2027, moderating from 11.5 per cent in 2026, but healthcare expenses will continue to grow substantially faster than overall inflation, a report said on Tuesday.
The report from professional services firm AON said the net medical trend rate is expected to fall from 7.4 per cent in 2026 to 6.1 per cent in 2027 after adjusting for India’s projected inflation rate of about 4 per cent.
The report indicated that healthcare costs will continue to rise materially faster than general prices.
India’s projected medical trend rate remains above the Asia Pacific average, which is expected to decline from 11.3 per cent in 2026 to 9.7 per cent in 2027. India’s rate is expected to exceed China’s projected 6 per cent, while remaining below Singapore’s 14.7 per cent, Thailand’s 11.7 per cent and Indonesia’s 17.3 per cent.
These variations reflect differences in healthcare systems, demographics, disease burdens and healthcare utilisation patterns, reinforcing the need for locally informed benefits and healthcare strategies.
“Moderation in India’s medical trend rate reflects easing cost pressures and improving conditions across many healthcare systems globally,” said Ashley DSilva, Head of Health and Wealth Solutions, India, Aon.
The report noted that long-term structural challenges persist, including chronic disease, growing demand for healthcare services and greater use of advanced treatments. Benefits budgets will remain under pressure with local medical costs still rising at more than twice the rate of inflation.
Employers need proactive, data-led strategies that combine their own workforce and claims insights with market benchmarks to optimise plan design, strengthen provider networks and support workforce resilience, the report noted.
Chronic health conditions remain among the most significant drivers of medical costs across the region. Cardiovascular disease remains the leading driver of medical claims, followed by ENT or lung and respiratory diseases and cancer. High blood pressure, physical inactivity and poor nutrition are also among the key risk factors expected to contribute to future healthcare claims.
Nearly 87 per cent of employers are likely to rely on wellbeing initiatives in 2027 to tackle costs. Two-thirds of employers are also expected to use flexible benefits as a cost-mitigation strategy, reflecting a growing focus on personalising benefits to meet diverse workforce needs while helping employers manage costs.
