Beyond the topline trends in benefits globally – these include increased cancer claims, widespread cardiovascular and metabolic health concerns and unmet mental health needs driving plan costs – there is change happening, both in medical approaches to certain conditions and in matters of cost containment.

“Insurers’ responses to these well-acknowledged themes cannot remain static,” say the authors of a new Health Trends 2025 Mercer Marsh Benefits report.

Embrace innovation 

The extensive report recommends embracing more innovative forms of cost containment, alongside the new treatment regimes. “Beyond traditional levers of cost control, innovative new practices are emerging. These have yet to be widely adopted and used by insurers,” they write. “Employers looking to contain cost should look beyond the obvious strategies.” They add that understanding unmet workforce needs and health risks will become even more vital in the future than before.

To reach its conclusions, Mercer Marsh Benefits surveyed 225 insurers across 55 markets. The findings include a troubling rise in the number of cancer claims among younger employees: 82 per cent of insurers report an increase in the incidence of cancer treatment claims over the last five years for individuals under the age of 50. They add that insurers in all regions reported an increase in these claims.

Cancer is identified in the report as being the top claims cause by dollar amount in 2023. Diseases of the cardiovascular system were identified as the top claims cost by frequency.

Metabolic and cardiovascular risk 

“’Metabolic and cardiovascular risk is the biggest risk factor for medical costs globally,” they write. “The World Health Organization (WHO) has identified cardiovascular disease as the leading global cause of death.” 

Overall medical trend rates are another highlight of the report. Medical trend, they say, is the year-over-year increase for claims under a medical plan on a per-person basis, assuming no changes to the benefits provided. In Canada, this increase was nine per cent in 2024 and is anticipated to come in closer to 10 per cent in 2025.

“Global trend rates are projected to stabilize in 2024 and 2025. However, rates continue to be persistently high. Nearly all regions are seeing trend rates above 10 per cent in both years. Insurers say 2024 trend is driven by medical inflation, utilization changes and changes to treatment mixes,” they state.

Balance economics and empathy 

To contain costs, they recommend a three-part approach: First, balance economics and empathy. “Consider eligibility, benefit limits, cost sharing and how private plans maximize public health resources and offerings,” they write. Next, they encourage insurers and plan sponsors to improve health outcomes through data-driven interventions and finally, push for financing and vendor management efficiencies.

The report also explores plan member education saying members can be encouraged to make cost-effective decisions. Currently only 46 per cent of insurers globally include this by default in their standard plans. It also examines artificial intelligence (AI) usage, benefits and risks, and applying enterprise risk management principles and frameworks to active plan management.

Despite a clear case for plan improvements, meanwhile, they say insurers anticipate that half of their plan sponsors will want to reduce plan coverage in the coming year. This, however, also leaves half of employers who are expected to make plan improvements. “Well-executed and active plan management can control costs without reducing plan scope,” they state. 

Double-digit cost increases 

Still, they warn all plan sponsors and their advisors to brace for double-digit cost increases, thanks to persistently high medical trend in most markets. “Be aware of intensifying risks, such as increased cancer diagnoses in younger employees through data analytics,” they suggest. Finally, they urge plans to develop a digital healthcare strategy. This, they say, should address both the opportunities and risks posed by emerging technologies to support cost containment and inclusive care alike.