New Zealand’s private health insurance market is facing continued cost pressure, with medical inflation forecast to remain well above global averages.
According to Aon’s 2026 Global Medical Trend Rates Report, medical plan costs in New Zealand are projected to increase by 18% in 2026, up from an estimated 17% in 2025.
By comparison, the global average medical trend is forecast at 9.8%, with Asia-Pacific at 11.3%.
What is driving the increase?
Medical trend refers to the annual percentage increase in the cost of providing healthcare services. It is influenced by factors such as service utilisation, treatment costs, prescription medicines, and new medical technologies.
Aon’s analysis highlights several drivers behind New Zealand’s higher forecast, including:
An ageing population
A higher burden of chronic disease
Increased use of private healthcare due to delays in the public system
Greater uptake of advanced and higher-cost treatments
Cardiovascular conditions, cancer, hypertension, diabetes and musculoskeletal issues remain key contributors to healthcare expenditure globally.
Insurers reporting rising claims activity
New Zealand insurers have also reported increased claims volumes and higher treatment costs.
Medical inflation (the rate at which healthcare costs rise) has accelerated in recent years, driven by new medicines and treatments, workforce shortages, servicing costs, and growing demand. Industry commentary suggests that utilisation levels have picked up as people access care that was delayed in earlier years.
For insurers, this combination of higher costs and increased claims activity places upward pressure on premiums.
What this means for policyholders
For individuals and families, rising premiums can prompt questions about whether to adjust cover levels, increase excesses, or review benefit structures.
While premium reviews are a normal part of health insurance, periods of elevated medical inflation can make it more important to understand:
What your current policy covers
Where the key benefits sit
Whether the structure still aligns with your needs and budget
How excess levels and optional benefits influence cost
Health insurance is designed to provide access to private treatment when needed. The value of cover often becomes most apparent at claim time, which makes understanding the structure before changes are made especially important.
Reviewing cover thoughtfully
With medical costs forecast to remain elevated, some employers are reviewing benefit design and wellbeing strategies, while individual policyholders may be reassessing personal cover.
Changes such as reducing benefits or replacing policies should always be approached carefully.
Policy definitions, exclusions and underwriting terms can vary between providers, and decisions made purely on premium may have longer-term implications.
If you have questions about your health insurance, whether it relates to rising premiums, cover structure, or future planning, speaking with an insurance adviser can help you assess your options in context and make informed decisions.
Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.
