The average medical trend cost rate for 2026 has been forecast to decline to 12%, down from 17% in 2025, according to research by Aon.
The medical trend rate represents the predicted annual percentage increase in employer-sponsored medical plan unit costs required to address projected price inflation, the cost of technology advances, higher plan utilisation and the rising cost of drugs.
Aon’s 2026 Global medical trend rates report also forecast that medical plan costs across the world will rise by 9.8% in 2026, returning to single-digit global growth for the first time since 2023.
The most notable decrease in medical trend rate is the 5% reduction in the UK, due to the flattening out of the post-pandemic surge in utilisation. The top medical conditions driving medical plan costs in the UK are musculoskeletal and back issues, cancer and tumour growth, and mental health disorders.
Overall, the top medical conditions that are expected to drive medical plan costs in 2026 are unchanged from 2025. These include cardiovascular diseases, cancer and tumour growth, and high blood pressure and hypertension.
Rachel Western, health and risk principal at Aon, said: “The UK’s medical trend rate has dropped significantly in this year’s report, reflecting the impact of targeted cost containment strategies and a shift toward more sustainable benefit designs. Employers are increasingly utilising data analytics to drive targeted health strategies and wellness initiatives that manage and improve employee health risk.
“We’re seeing a growing emphasis on targeted prevention and early intervention. Organisations can reduce costs and support long-term workforce resilience by both addressing risk factors early in a targeted way and with a more preventative angle.”
Kathryn Davis, global benefits vice-president at Aon, added: “While inflation is easing in some markets, healthcare costs continue to face significant pressure. This persistent rise in costs has become a widespread challenge, prompting organisations to take proactive steps. By leveraging predictive analytics and adopting innovative cost management strategies, [organisations] can better navigate ongoing volatility and strengthen their long-term benefits strategy.”
