Healthcare costs may rise slower in 2027, but why your medical bills could still hurt

Healthcare expenses in India may not rise as sharply next year, but that does not necessarily mean medical treatment will become cheaper. Medical costs are projected to increase by 10.1% in 2027, compared with 11.5% in 2026, according to a new report, titled ‘2027 Global Medical Trend Rates Report’ by Aon, a global professional services firm.

While the pace of increase is expected to slow, medical cost growth will continue to remain significantly higher than general inflation. This means households and employers may still have to deal with rising healthcare expenses.

According to the report, India's general inflation rate is projected at 4% in 2027, while the net medical trend rate, which accounts for inflation, is expected to be 6.1%, down from 7.4% in 2026.MEDICAL INFLATION TO REMAIN HIGHER THAN GENERAL INFLATION

The projected moderation in medical cost growth does not mean healthcare expenses will fall. Instead, it indicates that the pace at which medical costs are rising is expected to slow.

India's projected medical trend rate of 10.1% is also higher than the Asia Pacific average of 9.7% for 2027. The regional average is expected to decline from 11.3% in 2026.

Among major Asian markets, India's projected medical cost growth is higher than China's 6%, but lower than Singapore's 14.7%, Thailand's 11.7% and Indonesia's 17.3%.

These differences reflect variations in healthcare systems, population trends, disease patterns and the use of medical services across countries.

Commenting on the outlook, Ashley D'Silva, Head of Health and Wealth Solutions, India, Aon, said, "Moderation in India's medical trend rate reflects easing cost pressures and improving conditions across many healthcare systems globally."

However, he pointed out that long-term challenges remain, including chronic diseases, growing demand for healthcare services and increased use of advanced treatments.

"With local medical costs still rising at more than twice the rate of inflation, benefits budgets will remain under pressure," he said.HEART DISEASE, RESPIRATORY DISORDERS DRIVE MEDICAL CLAIMS

Chronic health conditions continue to account for a significant share of medical claims across the region, the report noted.

Cardiovascular diseases remain the biggest driver of medical claims, followed by ENT and lung-related disorders, respiratory diseases and cancer.

Lifestyle-related risk factors such as high blood pressure, physical inactivity and poor nutrition are also expected to contribute to future healthcare claims.

The findings highlight the growing need to focus on preventive healthcare rather than relying only on treatment after a health condition develops.WHAT EMPLOYERS CAN DO TO MANAGE RISING HEALTHCARE COSTS

With medical expenses continuing to rise faster than general inflation, employers are looking at ways to manage healthcare budgets without compromising the quality of care available to employees.

Aon said wellbeing initiatives remain the most widely expected strategy globally, with 87% of employers expected to adopt them in 2027.

Flexible benefits are another growing area of focus, with around two-thirds of employers expected to use them as a way to manage costs. Such plans allow organisations to tailor benefits to the different needs of their employees while keeping healthcare spending under control.

Ariz Rizvi, Head of Health Risk Management, Health Solutions, India, Aon, said India's diverse and rapidly changing workforce makes a one-size-fits-all approach to employee benefits increasingly ineffective.

"Organisations that use data and analytics to understand workforce needs can better balance affordability with access to quality care," Rizvi said.

He added that investment in preventive care, flexible benefits and employee wellbeing could help companies build more sustainable healthcare programmes while supporting employee productivity, talent attraction and retention.

In other words, the slower pace of medical inflation may offer some relief, but rising treatment costs will continue to make healthcare affordability a concern.- Ends

Jasmine Anand is a Senior Reporter (Emerging Tech) at India Today. With over 15 years of experience, she has earlier worked as a Financial Journalist in a multinational equity research firm, tracking equities, stock market, economy, IPOs and market-moving stories. Jasmine's forte is to scribe meticulously complex facts and figures into lucid and interesting reads. In her leisure time, she loves binging on movies and is passionate about painting, calligraphy, arts and crafts.