healthcare benefit costs


As a whole, close to three in four insurers (73%) surveyed in Asia Pacific anticipate "higher or significantly higher" increases over the next three years.

Healthcare benefit costs in Asia Pacific are expected to rise by 10.2% in 2023, a rebound from data recorded in 2022 (6.9%). Globally, these costs are expected to rise by 10% next year, up from 8.8% this year.

As a whole, close to three in four insurers (73%) surveyed in Asia Pacific anticipate "higher or significantly higher" increases over the next three years, according to WTW's 2023 Global Medical Trends Survey.

Projected 2023 healthcare benefit costs in Malaysia

Looking at Malaysia in specific, insurers in the country are projecting a continued increase in the medical trend, from 12.9% in 2022 to 13.8% in 2023. As the country returns to normalcy, the rate of increase is expected to return to the pre-pandemic trend. Per further data provided, the "flow of patients at hospitals and clinics have generally returned to normal, along with the increased cost of medicine and medical procedures."

In terms of employer focus, there is an "unmistakable uptick" in the interest level of wellbeing programmes, especially in mental wellbeing, with 60% of employers surveyed expressing concerns over employees’ stress and burnout. However, this has not translated to any corresponding increase in wellbeing budget allocation as employers struggle with shrinking budgets and inflationary pressures.

Additionally, it was noted that the implementation of structured wellbeing programmes is more prevalent amongst multinationals and government-linked companies, with other employers, in general, requesting basic wellbeing initiatives to be incorporated into their insured benefits programme. Currently, some insurers have extended mental illness coverage with additional premiums to selected clients.

How does Malaysia compare to its regional counterparts?

Keeping the above in mind, how does Malaysia's data fare in comparison to other markets in the region?

As revealed in the survey, Malaysia's projected increase in 2023 healthcare benefit costs is lower than that of New Zealand, which is expected to rise by 15%. On the other hand, its projection is higher than those of the rest of the markets surveyed in the region:

  • The Philippines: 12.6%
  • South Korea: 11.5%
  • Indonesia: 10.6%
  • Vietnam: 10%
  • Singapore: 9.8%
  • China: 9%
  • Hong Kong: 8.8%
  • India: 8.6%
  • Australia: 8.3%
  • Thailand: 7.9%
  • Taiwan: 7.8%

Taking a closer look at neighbouring Singapore, the city-state's fast-ageing workforce, coupled with a heavier chronic disease burden, have remained key contributors to the rise in healthcare costs. Other contributing factors include overuse of care by insured members, as well as overtreatment or overprescribing by medical practitioners.

The survey findings added: "Though not expecting to benefit from short-term results, organisations are now more open to preventive care and wellbeing programmes, adopting a more strategic and longer-term view to tame their medical cost increases with more employers requesting to integrate wellbeing as a core component of their healthcare benefit programmes."

What is driving the increases in Asia Pacific, in general?

Similar to what is seen in Singapore, the top driver of medical costs in the region, the data noted, continues to be overuse of care (81%) due to medical professionals recommending too many services or overprescribing. This is followed by insured members' poor health habits (58%). Additionally, the underuse of preventive services (46%) has also been identified as a significant cost driver, increasing year-over-year due to, in part, the avoidance of medical care during the pandemic. 

In terms of factors affecting the workforce more deeply, mental health conditions such as anxiety and depression continue to be in the top - with insurers expecting mental and behaviour disorders to be among the top five fastest-growing conditions by incidence of claims in the region in the next 18 months.

Apart from the above, insurers have also ranked treatments related to reproductive systems as one of the top five conditions affecting medical costs this year. The pandemic has also highlighted health disparities among different employee groups, promoting employers to place a greater emphasis on diversity, equity, and inclusion (DEI) in their healthcare strategy.

On this, Eva Liu, Head of Strategic Development, Health & Benefits, Asia and Australasia, WTW, commented: "Exclusions persist for conditions in areas related to DEI, a key priority and board-level issue in many organisations. These exclusions range from fertility treatment, HIV/AIDS, treatments related to menopause and other mental and behavioural health including but not limited to Autism, ADHD and so on. Employers should consider how they can bridge these coverage gaps and help deliver more equitable health outcomes across different employee groups.

"Healthcare affordability remains top of mind for insurers, employers and employees. As we move into next year, we see a challenging year for employers in trying to balance the convergence of rising medical trends, salary pressures, and the need to continue to make progress on DEI initiatives globally, all while dealing with potential recessionary markets," she added. 


WTW conducts the Global Medical Trends Survey every year between July and September. A total of 257 health insurers representing 55 markets participated in the 2023 survey, with Asia Pacific making up 38% of the overall numbers. Regional and global trend rates have been weighted using GDP per capita. 

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