India’s employer-sponsored health plans are set for another costly year. Mercer Marsh Benefits projects a 9.9% rise in medical costs in 2026, matching the trend seen over the past two years. Higher healthcare utilisation, costlier treatments, and rising claims for cancer, cardiac issues, and musculoskeletal conditions fuel the increase.

Based on a survey of 268 insurers across 67 markets, the report highlights growing pressure on employers. This is especially true in urban centres, where lifestyle risks, workplace stress, poor ergonomics, and pollution are driving up expenses.

Marsh McLennan India CEO Sanjay Kedia said companies may need to rethink benefits strategies. This includes tightening risk controls and co-pay structures and strengthening preventive and primary care through OPD solutions. Early intervention, condition management, and stronger network oversight, he noted, can help contain costs without affecting care quality.

Mercer Marsh Benefits India MD Prawal Kalita added that ageing workers, delayed primary care, and advanced therapies are pushing medical inflation higher. He warned that shifting costs to employees offers only temporary relief. Moreover, it may lead to higher claims over time.

The report also points to coverage gaps in mental health, reproductive care and support for older employees. With people working longer, preventive care and routine screenings are becoming crucial for long-term cost control.

Looking ahead, employers are expected to focus more on managing high-cost claims. They will also enforce clinical pathways, encourage second opinions, and optimise site-of-care decisions. All these efforts are aimed at keeping health plans sustainable while supporting workforce well-being.

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