New Zealand’s employee healthcare costs are forecast to increase 18% in 2026, well above global and regional projections, according to Aon’s 2026 Global Medical Trend Rates Report. The outlook points to continued cost pressure on employer-sponsored health plans and the wider private health insurance market.
Aon’s analysis estimates that medical plan costs in New Zealand will rise from a projected 17% in 2025 to 18% in 2026. By comparison, the global medical trend is forecast at 9.8%, with Asia-Pacific at 11.3%. The firm defines medical trend as the annual percentage change in per-employee medical plan costs across both insured and self-insured arrangements, used as a benchmark for pricing, budgeting, and plan design.
The report points to several underlying factors behind New Zealand’s elevated forecast:
Cardiovascular disease, cancer, hypertension, diabetes, and musculoskeletal conditions remain the main clinical categories contributing to expenditure.
Anson Davies, head of health solutions, New Zealand, for Aon, said the country’s unusually elevated medical trend rate is likely to influence how employers approach health benefits. “While universal healthcare provides a strong safety net, the sharp rise in supplementary medical costs highlight the need for a more holistic approach to workforce wellbeing. Employers who invest in preventive health and mental health support are not only managing costs – they’re building a healthier, more engaged, and resilient workforce ready to meet tomorrow’s challenges,” Davies said.
Findings from WTW’s 2026 Global Medical Trends report indicate that New Zealand’s experience sits within a broader pattern of rising health costs. WTW expects global health insurance costs to increase 10.3% in 2026, following projected rises of 10% in 2025 and 9.5% in 2024.
Asia-Pacific is forecast to record the largest regional increase at 14%, followed by Latin America at 11.9% and the Middle East and Africa at 11.3%. North America and Europe are projected to see lower increases of 9.2% and 8.2%, respectively.
Insurers operating in New Zealand report that underlying medical inflation and claims activity have picked up. “We understand that rising health insurance premiums are a real concern for many New Zealanders. This is an industry-wide challenge driven by the real cost of healthcare. Medical inflation – the rate at which healthcare costs rise – has jumped from 7.4% in 2024 to 14.5% in 2025, one of the highest rates in Asia-Pacific,” Alex Kϋhnast, AIA NZ chief product and marketing officer, told Stuff. Kϋhnast cited new medicines and treatments, workforce shortages, servicing costs, and growing demand as drivers that “have significantly increased the cost of medical care,” along with constraints in the public system that have contributed to higher private claims volumes.
UniMed chief executive Lance Walker said the sector is facing “significant upward pressure on premiums.” He noted that “the cost of medical treatments, new treatment technologies, and private hospital services has increased significantly in recent years, well outpacing general inflation.” In the year ending June 2025, UniMed paid more than 180,000 claims, up 53% from the year ending June 2024. Average claims paid per day increased from $394,000 to $612,000, with total claims paid reaching almost $160 million.
Southern Cross Health Insurance (SCHI) has reported similar trends. Chief sales and marketing officer Regan Savage said claim numbers rose 16% in the last financial year, with total claims value up 14%. In the year to June 30, 2025, the average amount claimed by members aged over 65 was more than three times that of members aged 35 to 49.
Savage said Southern Cross regularly fields questions about discounts for long-standing members. “If we gave a discount to long-standing members, we would need to raise premiums for younger members or those who have been with the society a shorter time. This would create a disincentive for those members to join or stay,” he said, adding that attracting and retaining younger members at competitive rates helps keep the portfolio’s age profile and premium levels more stable.
Aon’s projected 18% medical trend is prompting New Zealand employers to review benefit design, cost sharing, and health strategy. Many organisations are expanding preventive health and wellbeing initiatives, including programmes covering physical activity, nutrition, stress, and mental health, as well as screenings, vaccinations, and access to employee assistance services. Digital health and telehealth options are increasingly being incorporated into plans, alongside ergonomic and workplace health measures.
At the same time, policyholders are responding to premium increases by changing cover levels, raising excesses, or cancelling long-held policies, according to Stuff. Insurers have told members that annual premium reviews are needed to reflect shifts in claims costs and capital requirements, and have encouraged customers to consider alternative products or benefit structures within the same provider.
