India’s employer health plan costs to rise by nearly 10% in 2026, according to Mercer Marsh report

Employer-sponsored health plans in India are expected to face continued cost pressure into 2026, with Mercer Marsh Benefits estimating a 9.9% Medicare trend for the year. Year-on-year growth in per capita health claims is projected to be unchanged through 2024 and 2025 and broadly in line with global medical inflation.

The findings are part of the firm’s 2026 Health Trends report, which is based on a survey of 268 insurers in 67 markets. Cancer, circulatory diseases and musculoskeletal conditions account for the highest claim costs. Higher use, more expensive therapies and occupational risks – including job demands, poor ergonomics and exposure to noise and air pollution – are contributing to increased expenditure in urban centres.

Sanjay Kedia, chief executive officer, Marsh McLennan India, said organizations may need to strengthen long-term profit strategies.

He pointed to measures such as reviewing risk controls including co-pay structures and increasing focus on preventive and primary health care through OPD solutions.

According to them, early intervention, condition management and effective network monitoring can support cost management while maintaining care standards.

Prawal Kalita, managing director, Mercer Marsh Benefits India, said increasing plan utilization due to aging population, delay in primary care, cost of advanced treatments and rising incidence of cancer, cardiovascular and respiratory diseases are driving medical inflation.

He said the cost changes may provide temporary relief but over time could reduce access and increase claims. They recommended benefit optimization, improved management of high-cost claims, stronger network management and clear primary care pathways.

The report highlights ongoing gaps in benefits coverage, particularly in mental health, reproductive health and support for older workers.

Globally, about half of insurers cover mental health counseling, while few provide coverage for medication or screening, indicating scope for broader access. As individuals work longer, preventive care measures such as screening and regular primary care visits are becoming more important in managing long-term costs.

Globally, 76% of insurers expressed concerns about inefficient or wasteful care. In Asia, high cost claimants were identified as the primary affordability concern, followed by inefficient care, technological advances and aging-related needs.

The report suggests employers can prioritize initiatives such as stronger monitoring of catastrophic claims, compliance with clinical pathways, second opinion requirements and site-of-care optimization.

Mercer Marsh Benefits expects Indian employers to increase focus on cost-management and risk-mitigation strategies to maintain sustainable health benefits while supporting workforce flexibility.