A finance director renewing a private medical scheme this autumn is being quoted a double-digit increase for the third year running. WTW’s 2026 Global Medical Trends Survey puts UK medical inflation at 10% for the coming year, down from 10.6%, against a European average of 8.2%. The easing is real but small, and it leaves the UK close to two percentage points above the region it competes with for staff.
What makes this renewal season different is the backdrop. For most of the last five years the standard explanation for rising Employer Health Cover costs was that the NHS could not keep up, so more claims landed on corporate policies. That explanation is now harder to sustain without qualification, because the NHS has just posted its strongest elective performance in years. The premium went up anyway.
What the Survey Actually Measured
WTW surveyed 346 health insurers across 82 countries, with input from local brokers in 54 more, and its findings were reported by trade title Health & Protection. Globally, the cost of medical benefits is projected to rise 10.3% in the coming year, after 10% and 9.5% in the two years before it.
The regional spread is wide. Asia Pacific expects 14%, the Middle East and Africa 11.3%, and Latin America 11.9%, the sharpest acceleration in the survey. North America is easing slightly to 9.2%. Europe sits lowest at 8.2%, barely changed from 8.3%.
The UK’s 10% therefore is not a European problem experienced locally. It is a UK outlier within a comparatively calm region, and for a business with staff in several European markets it shows up as an uneven line across the benefits budget rather than a uniform increase.
The Reason Insurers Give Is Getting Weaker
Asked what drives cost, 74% of insurers named new medical technologies, 49% named pharmaceutical advances, and 52% named the decline of public health systems. That third answer is the one UK employers have heard most often from brokers, and it is the one the domestic data now complicates.
In May, NHS England reported that 65.3% of patients were waiting 18 weeks or less in March, meeting its target for the first time in years. The overall list stood at 7.11 million, the lowest in three and a half years, down 515,000 since July 2024 and 312,000 over twelve months, the largest annual fall in sixteen years. Patients waiting more than a year fell 48% in a year and 69% since July 2024, reaching their lowest level in six years. The service recorded 18.6 million treatments in twelve months, 506,000 more than the previous year, and 29.9 million diagnostic procedures.
Sir Jim Mackey, the NHS chief executive, called it “a huge moment for the NHS” and said hitting the targets “hasn’t happened by accident”. The health secretary, Wes Streeting, described it as “the biggest cut in waiting lists in a single month in 17 years”, while adding “lots done, lots more to do”.
The Improvement Has Not Held in a Straight Line
The caution in that last phrase matters for anyone budgeting on the assumption that NHS recovery will pull premiums down. British Medical Association analysis of the June figures puts the list back up at 7.27 million cases, covering roughly 6.15 million individual patients. About 2.48 million had waited more than 18 weeks and around 106,000 more than a year.
The median wait was 11.9 weeks. Before the pandemic, in June 2019, it was 7.5 weeks, and in February 2020 the list held 4.57 million cases. The BMA’s reading is that progress remains slow relative to the scale of the backlog.
Both readings are true at once, and that is the practical point. March was a genuine milestone; June showed the trend is not linear. An insurer pricing a 2027 renewal is not looking at a single good month, it is looking at claims experience over years, and it prices the volatility as much as the level.
What Is Actually Pushing the Claims Bill Up
The clinical detail in the survey explains more of the increase than the NHS argument does. Cancer was named by 57% of insurers as the fastest-growing and most expensive diagnosis, and 75% reported rising incidence in people under 40. Cardiovascular conditions were cited by 50% and behavioural health by 37%.
Those are structural cost drivers, not queue-driven ones. A younger cancer caseload lands squarely on employer schemes because it falls on people of working age, and it tends to involve newer, costlier treatment pathways. That combination raises the average claim rather than merely the number of claims, which is why cover can reprice even in a year when public provision improves.
Linda Pham, WTW’s global health and risk leader for integrated and global solutions, framed it as a shared trend rather than a national one: “Despite variations in healthcare provision in different countries and regions around the world, rising medical costs are a consistent trend for all.” She noted that while new technology is currently adding cost, “following this phase new technologies are expected to reduce healthcare cost trends in the longer term.”
Fifty-Five Per Cent Expect This to Last
More than half of the insurers surveyed, 55%, expect elevated cost levels to persist for more than three years. For a finance function, that turns an annual irritation into a medium-term line item, and it changes the sensible response.
A one-year spike is absorbed or passed through. A three-year trend at 10% roughly compounds to a third more cost by the end of it, which is the point at which scheme design, excess levels, eligibility tiers and the split between insured and self-funded provision stop being administrative questions and become budget ones.
It also affects the argument for keeping the benefit at all. Health cover has become a retention tool in tight labour markets, and withdrawing it is visible in a way that trimming other overheads is not. The realistic options are usually redesign rather than removal.
What Employers Are Being Advised to Do
Kevin Newman, WTW’s head of health and benefits for Europe, pointed to demand-side measures rather than cover cuts: “investing in education for employees on the use of health benefits, raising awareness of prevention programmes for prevalent diseases like cancer, optimising mental health coverage, and introducing flexibility of benefits.”
The logic is that a scheme’s cost follows how it is used. Employees who default to the most expensive pathway because nobody explained the alternatives generate claims that better guidance would have routed differently. Prevention aimed at the conditions actually driving the bill, cancer and cardiovascular disease, targets the same arithmetic from the other end.
None of that produces a saving inside one renewal cycle, which is the awkward part of the advice. It is a three-year answer to a three-year problem, and it requires spending attention now on a benefit whose cost is already rising.
Workforce cost pressure rarely arrives in one place at a time. Our recent report on how UK manufacturing hired at a two-year high while output slowed covers another case where headcount decisions and demand moved in different directions.
The Number to Take Into the Renewal
The single most useful figure is not the 10%. It is the 1.8-point gap between the UK and the European average, because that is the part that is specific rather than global.
Medical inflation is running everywhere, and no negotiation removes it. What a UK employer can reasonably ask a broker is why the domestic figure sits materially above the regional one, whether that gap is narrowing as NHS performance improves, and what evidence supports the answer. WTW’s own finding that the UK burden is easing, with claims trends stabilising and rates falling for some conditions, is a fair starting point for that conversation.
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