Joy Agwunobi
Global medical insurance costs are set to climb further in 2026, deepening the financial strain on insurers, employers and households worldwide, according to the WTW 2026 Global Medical Trends Report.
The report projects an average 10.3 per cent increase in global medical costs, underscoring a sustained upward trajectory in healthcare spending that shows little sign of easing.
WTW noted that the latest projection continues a pattern of persistent cost escalation seen across most regions in recent years. More than half of insurers surveyed, 55 per cent believe the pressure will last for at least the next three years, driven by a combination of high treatment costs, growing demand for outpatient and pharmacy services, and deeper structural challenges within global healthcare systems.
At the centre of rising claims is cancer, which has emerged as the single largest and fastest-growing driver of medical costs globally. The report found that 57 per cent of insurers worldwide identified cancer as the most expensive diagnosis on their books, a trend that cuts across nearly all regions. Of particular concern is the growing incidence among younger populations, with almost three-quarters of insurers reporting an increase in cancer cases among people under 40.
Cardiovascular diseases are also placing increasing pressure on claims, ranking second among cost-driving conditions and cited by 50 per cent of insurers. Behavioural and mental health conditions followed closely, with 37 per cent of respondents identifying them as a major contributor to rising medical expenses, reflecting changing lifestyles, stress-related disorders and greater awareness and diagnosis.
Beyond disease patterns, the report identified several global forces reshaping healthcare costs in 2026. One of the most significant is the impact of tariffs and trade policies. Following recent tariff announcements by the United States affecting multiple markets, 81 per cent of insurers globally expect trade barriers to push healthcare costs higher over the next three years.
Insurers flagged supply chain disruptions as the primary concern, warning that rising costs for medical equipment, consumables and pharmaceuticals will increase hospitals’ operating expenses and, ultimately, insurance premiums.
WTW cautioned that higher premiums could erode affordability for employers and employees, while also squeezing insurer profitability in some markets as corporate clients scale back coverage.
The report also points to a gradual expansion in fertility and family planning coverage, driven largely by employer demand. Although 66 per cent of insurers still exclude fertility services from standard medical plans, coverage is gaining ground. Specialist consultations are the most common benefit, offered by 33 per cent of insurers, while fertility drugs and IVF treatments are increasingly being included, albeit often with limits.
Another emerging challenge is the growing use of GLP-1 drugs for obesity, which are currently covered by 38 per cent of insurers globally, with the highest coverage in the Americas. Insurers expect utilisation to rise sharply over the next three years, alongside costs, prompting many health plans to impose strict eligibility criteria tied to BMI thresholds, co-morbidities or treatment duration.
Regional outlook highlights widening cost gaps
WTW’s regional analysis shows that medical inflation will remain uneven across the globe. Asia Pacific is expected to record the highest cost growth, with medical inflation projected to rise to 14 per cent in 2026, up from 13.2 per cent in 2025. The region continues to struggle with expanding healthcare utilisation, higher drug prices and capacity constraints.
Latin America is forecast to see the rapid acceleration, with costs jumping from 10.5 per cent in 2025 to 11.9 per cent in 2026, reflecting currency pressures, rising private healthcare demand and limited public health funding in several markets. The Middle East and Africa region is also projected to experience further acceleration, with medical trends reaching 11.3 per cent in 2026.
By contrast, North America and Europe are expected to record more moderate increases of 9.2 per cent and 8.2 per cent, respectively. While these figures are lower than those in emerging regions, WTW noted they still represent historically elevated levels and remain broadly in line with 2025 trends.
Artificial intelligence adoption still at an early stage
The report also assessed the role of artificial intelligence in healthcare, finding that adoption remains limited but is expected to accelerate. Only 17 per cent of insurers currently report significant use of AI in their healthcare programmes, a figure projected to rise to 37 per cent within two years.
For now, most insurers say AI has had little impact on overall cost trends. However, expectations are shifting, with a growing share anticipating that AI could help contain costs over the medium term through improved diagnostics, fraud detection, care coordination and administrative efficiency, even as some warn it could initially drive costs higher.
Employers urged to rethink healthcare strategies
WTW concluded that rising medical costs will remain a defining challenge for multinational employers in 2026, regardless of regional differences in healthcare systems. With many cost drivers beyond employers’ control, the report urged organisations to adopt more strategic approaches to benefits design and spending.
Recommended actions include prioritising mental health support, strengthening cancer prevention and early detection initiatives, introducing greater flexibility in benefit structures, reviewing employee cost-sharing arrangements, and investing in education and preventive care programmes.
As global medical inflation shows no immediate signs of slowing, WTW warned that proactive planning and data-driven decision-making will be critical for employers and insurers seeking to balance affordability, access and long-term sustainability in an increasingly complex healthcare landscape.
