Medical bills are expected to rise 13 percent next year, beating the global average and Kenya’s inflation in a forecast that is set to put pressure on insurers to raise premiums.
London-headquartered professional services firm Aon says in its 2027 Global Medical Trend Rates Report that medical inflation in Kenya will reach 13 percent next year, moderating from 13.5 percent this year but remaining above the global average of nine percent.
Aon says the expected increase in the cost of treating patients and providing healthcare services is the product of an increase in the cost of basic needs or inflation, increased hospital visitations, a surge in drug costs, and a rise in imports.
‘The trend rate figures shown in this report represent the percentage increases in medical plan unit costs, both insured and self-insured, that are anticipated for the coming year,’ states Aon.
The rising medical costs could force insurers to increase premiums to match the swelling hospital bills.
The rising medical payouts have come on the back of escalating healthcare costs, increased hospital visits, and higher utilisation of outpatient and specialised services, leaving insurers weighing premium hikes, even as some have dropped some clients.
Medical costs such as consultation, laboratory tests and medicine have been on the rise, accelerating health inflation as major hospitals such as Nairobi Hospital pushed to charge insurers more.
Nairobi Hospital had rolled out an increase in prices ranging from 2.07 percent to 61.3 percent or between Sh70 and Sh5,000, affecting services such as computed tomography (CT scan), magnetic resonance imaging (MRI), ultrasound, X-rays, bed charges and intensive care unit (ICU). However, it shelved the increment after uproar from insurers.
Employees under employer-backed medical plans could see their employers review medical benefits, potentially exposing them to higher co-payments, deductibles and out-of-pocket expenses as companies seek to contain the cost of providing healthcare coverage.
Kenya’s projected 13 percent increase will mark the first moderation of the pace in five years, with the rate having climbed from 9.8 percent in 2023 to 12.5 percent the following year and 13 percent in 2025.
Aon’s forecast, which estimates annual changes in the cost of employer-sponsored medical plans, draws on expectations from its professionals working with corporate clients and insurers in more than 100 markets across the world.
Kenya’s projected medical inflation also exceeds its expected general inflation rate of 5.9 percent by 7.1 percentage points, indicating that healthcare costs will continue rising much faster than the overall cost of living.
The increase is also higher than North America (9.2 percent), Asia-Pacific (9.7 percent) and Europe at 7.5 percent. Latin America and the Caribbean are projected to record a 10.4 percent increase.
The Middle East and Africa region is expected to post a 12.2 percent increase, down from 15.3 percent in 2026. Aon attributes the moderation largely to easing foreign exchange volatility and lower general inflation.
‘While medical trend is easing, it remains more than triple the rate of inflation. Companies must take a proactive, data-led approach to managing costs while protecting the value of employee benefits,’ said Michael Pedel, head of global benefits at Aon.
The report ranked Kenya ninth highest in projected medical inflation among 19 African markets covered.
Kenya’s projected rise in medical costs is below Ethiopia (35 percent), Angola (25.5 percent), Egypt (23 percent), Nigeria (20.9 percent), Zimbabwe (18 percent) and Ghana, the Democratic Republic of Congo and Mauritius at 15 percent each.
Some of the African countries where employer-backed medical insurance schemes will see lower increases than Kenya include Côte d’Ivoire (10.3 percent), Zambia (10 percent), South Africa (9.8 percent), Tunisia (9 percent) and Botswana (8.5 percent).
Others are Lesotho (8 percent), Mozambique (7 percent), Uganda (7 percent), Morocco (6.5 percent) and Tanzania (5 percent).
Aon says the moderation in healthcare cost increases across Africa is largely driven by easing foreign exchange volatility and lower general inflation. However, dependence on imports and the rising prices of private and specialist care continue to keep medical cost increases in double digits.
‘The region [Africa] is still heavily impacted by the cost of imported pharmaceuticals, and the rising cost of private and specialist care is keeping the gross trend rate in the double digits,’ said Aon.
Beyond these market-specific pressures, Aon identifies chronic and lifestyle-related conditions as major drivers of medical plan costs globally. Cardiovascular disease remains the leading contributor, followed by cancer and hypertension.
Physical inactivity and obesity are key risk factors, while rising diabetes prevalence and newer prescription medicines are expected to add to future costs.
‘While the leading cost conditions remain unchanged, obesity and diabetes are becoming increasingly important drivers of future healthcare costs,’ said Kathryn Davis, vice-president and data and analytics leader, global benefits at Aon.