Medical Trend

Medical trend is the expected annual increase in the cost of healthcare for a plan, before anything specific to that plan's members is considered. It combines price increases (the same MRI costs more this year), utilization increases (people get more MRIs), and changes in the mix of services (more expensive drugs replace cheaper ones).

For 2025 most large employers were budgeting medical trend of 7 to 9 percent, the highest in more than a decade, with pharmacy trend closer to 10 to 12 percent driven by specialty drugs and the GLP-1 weight-loss medications. Trend is the floor for a renewal: a carrier starts at trend and then adjusts up or down for the group's experience. It's also the reason a plan that changes nothing still costs more every year. Over ten years at 7 percent, a plan's cost roughly doubles. Employers can't control national trend, but they can control their own: steering care to lower-cost sites, managing specialty pharmacy, and catching billing errors all run counter to it.

The takeaway: when your consultant quotes trend, ask what your plan's actual trend was for the last three years. If yours runs above the market, something specific in your claims is driving it, and that is findable.