Medical cost inflation is slowing across much of the world, but not in Brazil. According to Aon’s Global Medical Trend Rates 2027 report, costs associated with employer-sponsored health insurance plans in Brazil are projected to rise 11.1% next year, up from 9.7% in 2026. The country is moving in the opposite direction from the global average, which is expected to decline from 9.8% to 9%. In Europe, projected medical cost inflation has fallen from 8.2% to 7.5%, while in Asia-Pacific it has dropped from 11.3% to 9.7%. Brazil’s projected increase is more than three times the country’s expected general inflation rate of 3.4%. These figures measure anticipated growth in healthcare costs, rather than the premium increases insurers will necessarily pass on to policyholders.
The explanation goes beyond an aging population. Aon identifies cardiovascular diseases, cancer and chronic conditions among the main drivers of rising healthcare expenditure. In Brazil, the use of routine consultations and lower-complexity services has remained relatively stable, while demand for hospitalizations and more complex treatments has increased. Innovative drugs are expanding treatment options, but they also come at a price. This raises a question that receives too little attention: how much of the additional spending translates into better healthcare, and how much reflects higher prices, waste and inefficiency? An audit released in May by Brazil’s Federal Court of Accounts (TCU), the country’s public spending watchdog, found that the healthcare system still relies predominantly on payment models that reward the volume of procedures performed rather than the clinical outcomes achieved.
Financial data from Brazil’s health insurers add another dimension to the debate. According to the National Supplementary Health Agency (ANS), the regulator overseeing private health insurance, a sample of 214 insurers covering 43.9 million beneficiaries reported R$126.4 billion ($23.4 billion) in medical claims and related expenses in the first half of 2026. Their medical loss ratio — the share of premium revenue spent on healthcare services — reached 82.2%, up from 81.3% a year earlier. Despite mounting cost pressures, these insurers posted combined profits of R$8.5 billion, equivalent to 4.9% of total revenue. Litigation over healthcare coverage also adds to costs, although some disputes concern treatments already covered under insurance contracts. The TCU has noted that the impact of such litigation on premium increases has yet to be conclusively quantified. None of these figures proves that projected cost increases are unjustified. They do, however, underscore the need to distinguish between underlying medical costs, the premiums charged by insurers and their profit margins — three measures that are often conflated.
The challenge is particularly significant for employer-sponsored group health plans, whose annual premium increases are not subject to the regulatory ceiling applied to individual policies in Brazil. For companies, healthcare benefits account for a growing share of employment costs. For workers, persistent increases may mean higher out-of-pocket contributions, reduced benefits or greater difficulty maintaining coverage. Even as broader inflation remains relatively contained, private healthcare risks becoming increasingly unaffordable. Brazil needs to understand why its medical costs are accelerating while those in other regions are slowing. After all, spending more on healthcare can be good news when it delivers better treatments and longer lives. But when it means paying ever more for essentially the same outcomes, it becomes a productivity problem that employers, insurers and regulators can no longer afford to ignore.
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