SINGAPORE: The city-state’s medical insurance costs are projected to remain stable at 12% in 2025, consistent with 2024 levels, according to a recent report by WTW.
According to the latest report of the Singapore Business Review, this stability comes amidst a complex healthcare landscape marked by several challenges and trends.
Drivers of high pharmacy costs
The firm highlighted several factors contributing to high pharmacy costs. An ageing population is a significant driver, as older adults typically require more medical attention and prescription medications.
Additionally, there has been a rise in chronic diseases, which necessitates ongoing treatment and management. The high cost of advanced therapies and biologics further exacerbates the financial burden on the healthcare system.
Preferences for branded medications over generics also play a role. Branded drugs often come with a higher price tag compared to their generic counterparts, which are equally effective but less expensive.
Furthermore, supply chain disruptions and inflation challenges have added to the overall increase in pharmacy costs.
APAC leading global medical inflation
In the broader Asia-Pacific (APAC) region, medical inflation is expected to rise by 12.3% in 2025, up from 11.9% this year. This trend positions APAC as a leader in global medical inflation.
More than three-quarters (76%) of regional insurers anticipate higher or significantly higher medical trends over the next three years.
Anticipated demand for medical care
The demand for medical care is expected to remain high, with 62% of insurers in APAC predicting increased or significantly higher healthcare service demand over the next three years.
This sustained demand underscores the need for robust healthcare infrastructure and efficient cost management strategies to ensure that quality care remains accessible.
As Singapore and the broader APAC region navigate these challenges, stakeholders will need to collaborate and innovate to maintain the stability and affordability of medical insurance while meeting the growing healthcare needs of their populations.
