Vital Signs: Insights from Employers as Healthcare Costs Mount in the Middle East 

The total health benefit cost per employee is forecast to rise 8.2% on average in 2027 for US employers, marking the highest increase since 2003. With this year’s projected increase having been 6.7%, the latest prediction has come as a shock.

In the Middle East, healthcare costs for employers have been rising at a consistent double-digit pace since 2024, meaning they are no surprise for CFOs in the region.

For instance, increases of 10% and 10.5% were forecast for employers in the United Arab Emirates (UAE) in 2024 and 2025 respectively. Increases of 10% and 11% are also expected in 2026 and 2027 respectively.

During a radio interview with Dubai Eye, Marsh’s Adel Alderi explained that “what is mandatory is changing” and that “the regulator in Dubai has added a few features, including dental and psychiatric cover.” The value and importance of employee health and well-being is recognized in the Middle East, and it is ranked as the top motivation for offering employee benefits plans in the UAE (90%).

Having gathered insights from more than 300 employers from across the UAE, KSA, Egypt and Qatar, we have highlighted and explored the major trends shaping benefit priorities – including optimizing for cost and prioritizing inclusivity. 

Top employers in the Middle East are realizing that the most effective healthcare cost controls happen upstream via prevention and behavioural change. Crucially, the employers with the right cost-benefit approach see benefits as a strategic health optimization investment – not a cost center.

In Egypt, our findings reveal signs of a shift away from reactive cost containment in favour of a more proactive approach to cost sustainability this year. Education is a prime example, with 49% of the country’s employers seeking to offer guidance that encourages more effective healthcare choices. More are also planning audits of plan utilization to detect fraud, waste, and abuse (41%), up from just 30% in 2025.

We are also seeing employers in the UAE increasingly promote additional insurer services to help mitigate accidents and serious illnesses (enhancing benefits packages while controlling costs upstream). According to our survey results, 64% of UAE employers are planning to do so in 2026, up from 51% in 2025.

Results from Qatar point to continued reliance on preventative and engagement-based actions to manage medical costs. The majority (76%) of employers in Qatar stated that they implemented well-being programs and preventative care coverage in 2025, with 82% set to do so in 2026. When it comes to education, 64% said they were educating plan members on effective healthcare choices in 2025, but this percentage is not expected to increase this year.

The insights collated in our report confirm a pattern of progress when it comes to employers using smarter cost controls. But although we have seen instances of increased strategic sophistication, the data also reveals setbacks.

Access to claims data for informed decision-making is forecast to decline in 2026 across all four markets, with the largest disparity recorded in KSA. Just 30% of KSA employers will improve access in 2026 compared to 42% in 2025, a statistic that could be attributed to the heavy YoY trend in health insurance costs (around ~16% in H1 2026).

Regardless of how well-designed benefits may be, the desired results (in terms of cost optimization and impact) will still not be achieved if delivery is poor or financing assumptions are unrealistic.

Innovation must be funded and benefits need to be accessible without breaking the bank.

Our survey results have uncovered some consistent themes when it comes to the top three ways employers in the Middle East are prioritizing delivery and financing, but also some notable differences.

Negotiating more competitive premiums is deemed a top three priority for next year by employers from each of the four nations, but it only takes the top spot in two cases. In the UAE and KSA, it is comfortably ranked number one with 71% and 62% respectively. The top focus for employers in Egypt (65%) and Qatar (73%) is enhancing employee benefit communication.

Diving deeper into the topic of benefits communications specifically, we found that in each market, ‘ensuring employees understand how to effectively use their benefits’ was ranked the top communications priority for the coming year. According to our insights, 73% of employers in Egypt have stated this.

On account of the heavy cost increases witnessed across medical insurance markets in the Middle East, it has become necessary for employers to do more with less. This is believed to be one of the drivers of the growing focus on benefits communication, as employers try to highlight existing benefits like (Total Rewards Statement) and how to best use them. 

Employers in the Middle East are also actively seeking to create a culture of health – another effective upstream way to control medical costs. This is also a top three priority for all four groups, but Qatar claims the highest percentage of employers to highlight it (59%). The need to improve ‘appreciation of benefits’ (including how they fit into total rewards) is also a recurring top three communication priority.

To quote our own Adel Alderi once again, the rise in costs employers are navigating in the Middle East “isn’t driven by one single factor – it’s a combination of behavioural patterns leading to higher utilization, a treatment mix leaning towards high-cost claims, more advanced (and expensive) treatments, and inefficiencies in care delivery.”

According to our latest Health Trends for 2027, the medical trend rate for the Middle East overall is forecast to fall slightly – from 14.3% this year, to 12.9% in 2027. The highest rate can again be expected in Egypt according to predictions (19%), and the lowest in Qatar (8.5%). Be sure to explore the full findings.

At Marsh, we are helping industry-leading clients to strike the crucial balance between delivering on the diverse healthcare needs of their workforces and promoting inclusivity, while managing unprecedented cost increases.

Whether you need proven cost management or benefits strategies, health risk assessments or employee listening, contact our experts to continue the conversation.