1 in 5 APAC employers review insurance cover amidst higher medical costs

48% of workers say coverage shapes job moves, and 70% would stay longer for strong benefits.

Employers across Asia are adjusting their health insurance strategies as medical costs continue to rise in 2026, according to the Asia Employee Health Infographic and Insights 2026, part of the Changing Face of Global Employee Health report by Howden Employee Benefits.

Medical costs in the region are expected to remain above general inflation, increasing pressure on employer-sponsored health plans. 

Just over half of employers in Asia, or 51%, expect significant medical cost increases this year, compared with the global average of 41%. 

In response, 50% of employers have increased cost-sharing over the past 12 months. 

Many are also reviewing plan design, expanding flexible benefits and placing more focus on preventative care to manage claims costs.

Insurers in Asia expect cancer, cardiovascular disease, musculoskeletal conditions, and diabetes or other metabolic conditions to be the main drivers of medical plan costs in 2026. 

Employers also identify mental health, cardiovascular disease and hypertension as leading cost pressures. 

Obesity-related conditions are rising on the risk agenda, including the impact of GLP-1 drugs such as Ozempic on claims.

In the past year, 43% of employees in Asia used only private healthcare for their most serious treatment, and 54% said employer-provided private insurance covered the full cost of that treatment.

Health benefits remain closely linked to workforce retention. 

Nearly half of employees in Asia, or 48%, say health benefits influence their decision when looking for a new job. 

Around 70% say they are more likely to stay longer with an employer that offers good health benefits, compared with 60% globally.

Mental health is identified as a key cost driver for employer health plans. In the past 12 months, 38% of employees sought treatment for mental health, mainly through medication or group therapy, and 28% used their employee health benefits or medical insurance to access this support. 

Employers are responding by adding services such as Employee Assistance Programmes, peer support and digital mental health platforms. 

However, 18% of employees say they would feel uncomfortable using employer-provided healthcare for mental health due to concerns about confidentiality, career impact and stigma.

The report also points to the growing role of artificial intelligence (AI) in healthcare delivery. 

Around 64% of employees say they would trust AI in their healthcare journey, and 38% say they have already experienced its use, including in treatment planning, remote monitoring, telehealth and administration. 

Looking ahead, 45% of employers say they would like wider adoption of AI-powered care, particularly in claims processing and approvals, predictive analytics for high-cost claims, and diagnosis and screening.

Philip Samson, Regional practice leader, Asia, Howden Employee Benefits, said employers are analysing claims data and reviewing benefit structures as costs rise, whilst maintaining health insurance as a core part of their workforce strategy.