Regional Overview
Corporate health expenditure across Southeast Asia has continued its upward trajectory, with medical inflation rates exceeding general inflation in most markets. According to WTW's 2025 Global Medical Trends Survey, Indonesia's projected medical inflation rate for 2025 stands at approximately 19.4%, well above the Asia-Pacific average of 12.3% and the global Aon forecast of approximately 10%.
Drivers include rising inpatient costs, expanded coverage mandates, post-pandemic utilization normalization, and currency effects that affect the cost of imported pharmaceuticals and medical equipment.
Indonesia: Regulatory and Cost Pressures
Indonesia's employer health market is experiencing dual pressure from rising medical costs and new regulatory requirements under SEOJK No. 7/SEOJK.05/2025, which introduces mandatory co-payments and stricter insurer standards effective January 2026. These regulatory changes may reshape plan design and cost-sharing structures across the market.
The World Bank's health expenditure data shows Indonesia's current health expenditure as a share of GDP has been gradually increasing, reflecting both public (BPJS) and private sector growth in health spending.
Vietnam and the Philippines: Growing Markets
According to TechSci Research, Vietnam's health insurance market was valued at approximately USD 11.23 billion in 2024 and is projected to grow at a CAGR of roughly 8.2% in the years ahead. Growth is driven by foreign direct investment, rising employee expectations, and a competitive labor market in Ho Chi Minh City and Hanoi.
The Philippines market has seen growth fueled by mandatory PhilHealth reforms and a competitive labor market that pushes employers to offer private top-up coverage as a retention tool. PhilHealth, the national insurance program, provides baseline coverage that employers commonly supplement with private plans.
Key Implications for Multi-Market Employers
Employers operating across multiple Southeast Asian markets face challenges in harmonizing benefit levels, managing diverse regulatory requirements, and consolidating reporting across different TPA systems and currencies.
Centralized governance frameworks that allow local benefit flexibility while maintaining consistent cost monitoring and reporting standards are becoming the preferred operating model for regional employers.