Survey shows 67% of employers are promoting preventive care: How Medicare inflation is reshaping benefits

Businesses around the world are accelerating investments in preventive health care as rising medical inflation threatens to drive up employee benefit costs, according to new global findings from Howden Employee Benefits.

The Changing Face of Employee Health report reveals that 67% of employers are now spending more on prevention and wellness initiatives to curb future medical claims. The change comes amid widespread expectations of higher health care costs, with 93% of global employers expecting an increase and 41% expecting a significant increase.

Employees’ expectations are also shaping employer strategies.

The survey shows that 61% of employees are more likely to stay at a company that offers a strong health care package, while nearly half (47%) consider health benefits important when evaluating new roles.

Despite this, a quarter of employees say they don’t feel adequately supported, suggesting a gap between employer investment and employee experience.

Sector leading in preventive expenditure

Preventive health care spending varies widely across markets:

• Europe: 74%
• UK: 72%
• LATAM: 71%
• Pacific: 69%
• Asia: 56%
• IMEA: 55%

Howden’s insurer data shows global medical inflation The CPI is projected to reach 7% in net terms in 2026, bringing overall inflation above 10%.

This pressure is leading more companies to reevaluate health plans, even if they believe they offer good value.

Employers switch services as costs rise

While 86% of global employers believe they get a good return on their health care spending, many are still making changes to their plans:

• 23% have already changed insurance providers,
• 39% are planning to switch, and
• 26% are ready to switch if costs rise further.

Cost expectations vary by region.

Employers in IMEA expect costs to increase by 58%, compared to 52% in Asia, 46% in LATAM, 36% in the Pacific and around 27-28% in Europe and the UK.

What are the driving costs?

The medical conditions that affect benefit costs vary across regions:

• Globally, mental health is having the biggest impact, affecting 52% of plans.
• In the IMEA, cancer (44%) and cardiovascular conditions (42%) are the largest contributors.
• In the UK, mental health affects 64% of employers, far more than cancer (30%) or heart disease (16%).

Non-medical factors are also important:

• General inflation affects 62% of employers,
• Drug prices affect 53%.

Glenn Thomas, CEO and Global Practice Leader, Health and Employee Benefits, Howden, said employers are operating in a rapidly changing environment driven by new treatments, AI and cost pressures.

“Health care benefits are now a must-have for talent, yet many workers still feel unsupported,” he said.

Niran Chaudhary, national head of employee benefits at Howden India, said Indian companies consider employee health central to talent retention.

He said rising Medicare inflation requires employers to move beyond traditional sickness coverage and adopt more holistic, cost-efficient benefit strategies.