Healthcare costs in India is projected to rise at 13% in 2025, a rate higher than the global average (10%) and the cost increase in the previous year (12%), said Aon’s Global Medical Trend Rates Report 2025.
The report noted that the increase in healthcare cost is driven by rising hospitalisation rates and the growing adoption of advanced medical treatments. “With healthcare inflation consistently outpacing general inflation, employers in India are under increasing pressure to design sustainable medical benefits for their workforce,” it said.
There are several factors which are contributing to the healthcare inflation, including growing cases of cardiovascular diseases and hypertension, cancer treatment costs, and advanced prescription medications. “A key factor for rising inflation is the demand-supply mismatch in the overall healthcare system. Shortage of quality infrastructure and skilled professionals has also led to higher medical service costs, making healthcare less accessible,” the report adds.
Experts said that the increasing use of innovative treatments, especially biologics, has substantially raised treatment expenses. Although these advancements improve patient outcomes, they also drive up overall medical costs. “Additionally, the rising insurance premiums, fueled by higher claims and escalating medical expenses, are further increasing the issue,” the report said.
Rising medical costs in India is also posing a challenge for companies to ensure access to quality healthcare for their workforce while keeping the costs under control. Hence, many businesses have been adopting a slew of measures to mitigate risks. This include offering customisable healthcare options to the employees, promoting wellness programmes to reduce long-term medical expenses, and partnering with cost-effective healthcare providers.
Meanwhile, the global average medical cost is expected to increase by 10% in 2025, which is just shy of the projected increase for 2024 of 10.1%, which was the highest increase forecasted in 10 years. Also, the cardiovascular diseases are now the top medical condition anticipated to drive plan costs in 2025 replacing cancer.
