The regulation of artificial intelligence (AI) in health insurance has become a contentious issue, pitting state governments against the Trump administration. In a significant policy divergence, Republican Governor Ron DeSantis of Florida and the Democratic leadership in Maryland are advocating for stronger regulations on AI, while former President Donald Trump seeks to limit state authority in this area.
States Push for AI Oversight
As the use of AI in healthcare expands, at least four states—Arizona, Maryland, Nebraska, and Texas—have enacted laws to regulate its application by health insurers. This follows similar legislative actions in Illinois and California the previous year. In North Carolina, a proposed bill aimed at preventing insurers from using AI as the sole basis for coverage decisions garnered significant legislative interest.
DeSantis has introduced an “AI Bill of Rights,” which aims to restrict AI’s role in processing insurance claims and mandates that state regulators examine algorithms used by insurers. During his State of the State address in January, he emphasized the necessity of ensuring that technological advancements align with American values. “We have a responsibility to ensure that new technologies develop in ways that are moral and ethical,” he stated.
Polling data indicates that public sentiment aligns with these state-led initiatives. A December poll from Fox News revealed that 63% of American voters expressed high levels of concern regarding AI, with significant apprehension spanning across political affiliations. The KFF January survey highlighted widespread dissatisfaction with health insurers’ practices, particularly surrounding prior authorization processes.
Federal Resistance and Industry Pushback
In contrast, the Trump administration is actively promoting the integration of AI into federal programs. A December executive order aims to preempt state regulations, arguing that “excessive state regulation thwarts” the imperative for innovation. The order frames AI as crucial in maintaining U.S. technological competitiveness.
Health insurers have responded to the legislative wave with a mix of compliance and resistance. Executives from major companies, including Cigna and UnitedHealth Group, were recently called to testify before Congress regarding affordability issues linked to AI usage. Cigna CEO David Cordani asserted that AI is “never used for a denial” of claims, despite ongoing lawsuits against the company related to its denial practices.
Meanwhile, the American Medical Association has voiced support for state regulations that enhance accountability in AI applications within health insurance. CEO John Whyte highlighted the ongoing challenges doctors face, including delayed patient care and lack of transparency from insurers, which underscores the need for regulatory oversight.
In response to the growing regulatory landscape, industry representatives argue that a uniform federal policy is necessary to balance innovation with patient protection. According to Chris Bond, a spokesperson for the health plan trade group AHIP, “Health plans recognize that AI has the potential to drive better health care outcomes.”
However, experts warn that the proposed regulations may lack the necessary specificity to be effective. Daniel Schwarcz, a law professor at the University of Minnesota, points out that many state laws require human approval for AI-generated decisions without clear guidelines for what constitutes sufficient review.
Looking Ahead
As states continue to propose and enact legislation regulating AI in health insurance, the political landscape remains fractured. While some state leaders push for accountability and transparency, the Trump administration’s efforts to curtail state power complicate the situation. Legal experts suggest that Trump’s executive order could face challenges in court, given constitutional concerns regarding federalism and the division of powers.
California Governor Gavin Newsom, who has enacted some AI regulations, has been cautious about broader mandates, aiming to balance consumer protections with the economic interests that tech companies represent in the state. The ongoing debate reflects a wider struggle to define the role of AI in healthcare, as stakeholders from various sectors advocate for diverse approaches to regulation.
As the dialogue continues, the outcome will significantly impact how health insurers leverage AI technologies and the safeguards necessary to protect consumers in an increasingly automated healthcare landscape.
