India’s Medical Inflation Slows but Remains High: Aon Report

Medical trend rates represent the annual percentage increase in per-employee medical plan costs across both insured and self-insured plans and serve as a key indicator for organisations preparing long-term benefits strategies. While India’s projected rate remains above the global average of 9.8 percent, the pace of growth has slowed due to moderated utilisation levels. Cardiovascular diseases, gastrointestinal conditions and cancer continue to drive the highest medical costs, influenced largely by risk factors such as hypertension, high cholesterol and inadequate nutrition.

“India’s healthcare landscape is evolving, with employers increasingly adopting flexible benefit plans, cost containment strategies and wellbeing programs to manage rising costs,” said Ashley D’Silva, head of Health Solutions, India at Aon. “By leveraging data and partnering with insurers, businesses can better anticipate risks and support a healthier, more productive workforce.”

The report notes that innovation in advanced prescription drugs, specialty medications and biologics continues to push expenses upward, along with the growing burden of chronic diseases and increased use of healthcare services. A shortage of high-quality medical infrastructure and skilled professionals is also contributing to higher service costs nationwide. Rising claims and medical inflation are placing further pressure on insurance premiums.

Employers are responding with more flexible benefits, data-driven cost containment and expanded preventive health initiatives. Organisations are increasing access to dietetic services, weight management programmes and wellness interventions aimed at reducing long-term costs. They are also optimising hospital networks and enhancing access to telehealth, virtual mental wellbeing support and physiotherapy.

“The medical insurance market in India is transitioning into a new phase and businesses must be ready to deploy strategies that will deliver value,” said Ariz Rizvi, head of health risk management at Aon in India. He added that preventive wellbeing strategies and outcomes-focused programmes will be essential to sustain healthier, more productive workforces in the years ahead.