Singapore’s healthcare sector is expected to experience sustained increases in medical costs, with projections from WTW’s 2026 Global Medical Trends report indicating a 16.9% rise next year. This anticipated growth rate outpaces both the 15.5% increase seen in 2025 and the broader Asia-Pacific regional average, which is forecast at 14% for 2026.
The report, which surveyed 346 health insurers across 82 countries, found that a majority of APAC insurers expect medical cost inflation to continue, with 57% predicting further increases over the next three years and 42% expecting these conditions to last even longer.
Several elements are contributing to the persistent rise in healthcare expenses. The adoption of new medical technologies is identified as the leading factor, with 77% of insurers naming it as the primary driver of cost escalation. Pharmaceutical advancements (63%) and limited cost-sharing arrangements (51%) are also cited as significant contributors, pointing to ongoing changes in healthcare delivery and innovation.
From a clinical perspective, cancer remains the most significant condition influencing costs. In APAC, 58% of insurers identify cancer as the fastest-growing and most expensive diagnosis, and over 80% have observed an increase in cancer cases among individuals under 40. Cardiovascular diseases, musculoskeletal disorders, and diabetes are also highlighted as major contributors to rising claims.
Findings from the 2024 Manulife Asia Care Survey echo the WTW report, with 75% of Asian consumers identifying rising healthcare costs as their top financial concern, ahead of general inflation. The survey, which included 8,400 participants, found that perceived healthcare inflation averaged 23%, with the most significant increases reported in prescription medications, preventive care, outpatient services, and hospital stays.
Eva Liu, head of strategic development, Asia-Pacific, health & benefits at WTW, noted that while healthcare systems differ across APAC countries, the upward trajectory of medical costs is a common challenge. “Understanding the trends and drivers are crucial for employers and insurers to develop effective strategies to manage cost and improve healthcare outcomes for employees,” Liu said.
Singapore’s upward trend in medical costs is shaped by demographic and systemic factors. An aging population, higher rates of chronic diseases, and improved early detection are increasing demand for healthcare services. Singapore’s population is undergoing significant demographic changes, with a notable rise in the number of residents aged 80 and above. Data from the National Population and Talent Division shows that as of June 2025, approximately 145,000 Singaporeans are in this age group, compared to 91,000 in 2015 – an increase of nearly 60% over the past decade. Individuals aged 80 and older now represent 4% of the citizen population, up from 2.7% 10 years ago.
In addition, the integration of advanced treatments and pharmaceuticals, along with higher operational expenses due to real estate and wage pressures, are further intensifying cost growth.
As insurance coverage expands, patients are increasingly utilising advanced medical services and screenings, which is driving up overall spending. “In response, insurers in Singapore are raising co-pays and deductibles to instil shared responsibilities with the insured members and control escalating expenses,” said Fong Han Wei, head of health & benefits, Singapore at WTW.
Employers are being encouraged to focus on education and preventive health strategies to help employees make informed choices about their benefits. “Companies can include an element of flexibility into employee benefits programmes, so that employees can utilise the benefits they need. To control cost, employers should also consider introducing co-payment or co-insurance design to drive more thoughtful medical spending and discourage excessing claiming,” Liu said.
