TORONTO, Nov. 13, 2024 /CNW/ -- Aon plc (NYSE: AON), a leading global professional services firm, has released its 2025 Global Medical Trend Rates Report. In Canada, the report forecasted the average medical trend rate for 2025 to be 7.4 percent, up from 5.0 percent in 2024.
The medical trend rate represents the percentage increases in medical plan unit costs – insured and self-insured – required to address projected price inflation, technology advances in the medical field, plan utilization patterns and cost shifting from social programs.
"In 2025, we anticipate a return to more typical inflationary conditions, with the Bank of Canada projecting that inflation will be well under control," said Joey Raheb, senior vice president and Canadian national leader for growth and client engagement for Health Solutions at Aon. "However, our concerns are now shifting towards continued economic slowdowns, which will undoubtedly influence plan sponsor decisions. While we have yet to witness a full-scale pullback on spending, employers are exercising caution and continuously reviewing their plans for efficiency in delivery and optimal medical efficacy. Discussions are expected to continue to be dominated by GLP-1 drugs and chronic conditions, such as diabetes. Alongside these, efficient plan design that allows employers to deliver programs that meet the needs of a diverse workforce while keeping costs sustainable will remain a focal point."
The top medical conditions driving medical plan costs in Canada are:
- Diabetes
- Autoimmune Diseases (excl. Diabetes)
- Mental health
- Lung disorder/respiratory
- Cardiovascular & Weight loss
In its global report, Aon forecasts medical plan costs across the world will rise on average 10.0 percent in 2025, this figure is just shy of the projected increase for 2024 of 10.1 percent, which represented the highest increase forecasted in 10 years.
"Despite inflation projected to decrease in 2025, we expect health and wellbeing costs will continue to rise. As a result, medical plans are an important concern for companies, especially those with a global footprint," said Kathryn Davis, vice president of global benefits at Aon. "Rising costs often bring unexpected budget increases and makes affordability for employers and employees more difficult."
"As employer-sponsored medical plans become a larger part of total rewards spend, we are seeing businesses leverage trend rate data to inform their budgets and benefits strategies," Davis added. "Wellbeing initiatives are again the leading mitigation strategy as they help to control costs by encouraging utilization of preventative care and by keeping employees engaged in their wellbeing."
Aon conducted the survey across 112 countries and locations that broker, administer or advise on employer-sponsored medical plans in each of the countries covered in this report. The survey responses reflect the medical trend rate expectations of Aon professionals based on their interactions with clients and carriers represented in the portfolio of the firm's medical plan business in each location.
Read Aon's 2025 Global Medical Trend Rate Report here.
About Aon
Aon plc (NYSE: AON) exists to shape decisions for the better — to protect and enrich the lives of people around the world. Through actionable analytic insight, globally integrated Risk Capital and Human Capital expertise, and locally relevant solutions, our colleagues provide clients in over 120 countries with the clarity and confidence to make better risk and people decisions that protect and grow their businesses.
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SOURCE Aon plc
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