As health insurance costs continue to rise sharply across the Irish market, employers are no longer rolling over their private medical cover for employees.
Health insurance remains one of the most valued benefits for Irish employees. But, maintaining meaningful cover, and managing cost pressures in tandem, requires proactive oversight, data‑led decision‑making, and a clear long‑term strategy.
Rises in medical inflation
Over the past 12 months, all major insurers have announced premium increases with annual uplifts a regular feature of renewals for many employers. For 2025, the Health Insurance Authority’s Annual Market Report (opens a new window) revealed that average health insurance prices rose by 10.6%.
Looking ahead, global healthcare costs are projected to increase by approximately 10% (opens a new window) in 2027, according to our Global Healthcare Cost Trends report.
Employers will be acutely aware of the drivers behind these increases. And while numerous factors are causing premiums to grow, the main reasons are:
Demand for private healthcare services remains high as the insured population continues to age and more people access treatment.
Medical inflation continues to outpace general inflation, with the cost of procedures, hospital care, and specialist treatment steadily rising year on year.
Claims utilisation has increased, alongside continued growth in the scale and cost of claims across the private healthcare system.
The emergence of new treatments and technologies, which can be costly.
An increase in the health insurance levy (opens a new window) – which ultimately feeds into the overall cost of premiums.
For employers, inflation isn’t a single year issue, but a sustained pressure that has a cumulative impact on healthcare costs. While businesses may have initially been able to absorb annual premium increases, this has become unsustainable and exacerbated by other financial pressures mounting. Rising premiums can eventually exceed available budgets, forcing difficult decisions surrounding benefits budgets, workforce strategy, and total rewards investment.
Changing your approach to reviewing private medical insurance
Renewing company medical insurance requires more than parochially reviewing premium increases. Instead, there is a more fundamental question that should sit central to any decision made: is this still the right plan?
Employers should adopt a more strategic and proactive approach by comparing changes to benefits, administration, and hospital access, rather than just price.
All businesses should consider how long their current scheme has been active. Simply rolling over cover on a like-for-like basis is no longer a prudent approach.
If the existing plan is multiple years old, a review is essential. Across the four providers for the Ireland market, there are currently 320 different plans to choose from. The market is constantly evolving with new plans being released, alongside changes to benefits on existing plans and corresponding rises in prices.
Regularly reviewing the market with a specialist health insurance advisor can help ensure both value for money and scheme suitability. With little indication that medical inflation will ease, employers should assess the long‑term sustainability of their current plan and consider strategic adjustments for the future.
Case study: how Lockton delivers value for their clients
The following case study explores how Lockton recently helped an Irish business tailor their health insurance programme for their changing workforce.
In 2025, a tech company in Ireland began scaling operations to satisfy increasing customer demands. This period of growth saw headcount significantly grow to reach around 250 employees by mid-2026.
However, the company was mindful that the growth must be sustainable, and a key facet of this was ensuring that their health insurance programme remained fit for purpose, while maintaining cost efficiency.
Lockton was appointed to conduct a thorough review of their existing healthcare arrangements. Our analysis interrogated the workforce’s demographic profile and health claims utilisation to ascertain whether the existing plan would continue to align with their employees’ needs and future workforce planning.
Our data-led approach enabled us to recommend a revised health plan that was able to supply a similar level of cover whilst achieving cost savings of 15%.
Designing the right programme for you
Employers have limited powers to negate rises in health insurance premiums and the underlying cost of healthcare.
However, managing the design and cost of their health insurance programme is within their control. As such, when medical inflation is outpacing general inflation, the value of structuring the appropriate plan for their business, and how it is funded, has never been more important.
For example, companies may be contending with an ageing workforce possessing increased healthcare needs, higher levels of long-term sickness, and greater absenteeism.
By understanding the underlying reasons for employee absence and analysing historical and ongoing healthcare claims, employers can identify patterns and the risks they pose.
This insight informs the design of an appropriate health insurance plan that is driven by the fundamental needs and claims experience of the current and future workforce – rather than an ineffective one-size-fits-all approach.
Many employers work directly with their health insurance provider. However, health insurance comparisons can be a lengthy and complex exercise, requiring considerable time and specialist expertise that employers often lack. Engaging external support can help streamline the process and ensure informed decisions are made.
Reaching out
Lockton People Solutions works with employers across Ireland to help them navigate the vast range and complexity of private medical insurance plans. We believe in data‑led insight, market expertise, and strategic programme design; not simply a set and leave.
By analysing claims experience, benchmarking insurer options, and supporting informed decision‑making, we help organisations manage cost pressures, while continuing to deliver high‑value health benefits for their workforce.
For a free, non-obligation audit of your current medical insurance plan, reach out to Ross Mitchell or Mark Ruddy.
