KFF Health News: Bipartisan Push to Restrict AI in Insurance; Trump Advocates for State Limitations
February 18, 2026
KFF Health News: Red and Blue States Alike Want To Limit AI in Insurance. Trump Wants To Limit the States.
In a rare display of bipartisan concern, Republican Governor Ron DeSantis of Florida and the Democratic leadership in Maryland are joining forces against President Donald Trump and California Governor Gavin Newsom on the contentious issue of artificial intelligence (AI) in health insurance. The question at hand is how health insurers should utilize AI, a topic that is increasingly becoming a political flashpoint.
Proponents of AI, led by Trump, are advocating for its integration into government systems, such as Medicare’s AI pilot program for prior authorization. However, they are also attempting to thwart state-level regulations aimed at curbing AI’s influence. A December executive order from Trump seeks to preempt most state efforts to regulate AI, framing it as a race for technological supremacy.
“To win, United States AI companies must be free to innovate without cumbersome regulation,” the order states, emphasizing that “excessive State regulation thwarts this imperative.”
In response, several states are pushing back. Last year, Arizona, Maryland, Nebraska, and Texas enacted laws to limit AI’s role in health insurance, following similar actions in Illinois and California the previous year. Rhode Island legislators are also planning to revisit a bill aimed at collecting data on AI usage, while North Carolina’s proposed legislation would prevent insurers from using AI as the sole basis for coverage decisions.
DeSantis has introduced an “AI Bill of Rights,” which includes provisions to restrict AI’s use in processing insurance claims and mandates that state regulatory bodies inspect algorithms. “We have a responsibility to ensure that new technologies develop in ways that are moral and ethical,” he stated during his State of the State address in January.
Ripe for Regulation
Public sentiment is wary of AI, with a December poll from Fox News revealing that 63% of voters are “very” or “extremely” concerned about AI. This concern spans both political parties, with nearly two-thirds of Democrats and just over 60% of Republicans expressing apprehension.
Moreover, the tactics employed by health insurers to control costs have raised alarms. A January poll from KFF found widespread dissatisfaction with issues like prior authorization. Investigative reporting from ProPublica and other outlets has highlighted how algorithms are used to swiftly deny claims or prior authorization requests, often with minimal oversight from medical professionals.
Last month, the House Ways and Means Committee summoned executives from major health insurers like Cigna and UnitedHealth Group to address affordability concerns. When questioned, these executives either denied or sidestepped inquiries regarding the use of advanced technology in claim denials.
Cigna CEO David Cordani asserted, “AI is never used for a denial,” while the company faces lawsuits over its claims denial practices. Meanwhile, Optum, a subsidiary of UnitedHealth Group, announced on February 4 that it is implementing tech-driven prior authorization, emphasizing quicker approvals.
Despite this, some legislators, like New York Assembly member Alex Bores, argue that AI is an area ripe for regulation. “Many people find the answers from their insurance companies inscrutable,” he noted, adding that adding an unexplainable layer of AI could complicate matters further.
Support for regulation is also coming from the medical community. The American Medical Association has expressed its backing for state regulations that demand greater accountability and transparency from insurers using AI in prior authorization requests. CEO John Whyte pointed out that AI is already in use, yet doctors still face delays and opaque decisions from insurers.
Insurers Push Back
With legislation either approved or pending in at least nine states, the impact of these laws remains uncertain. University of Minnesota law professor Daniel Schwarcz notes that many state laws cannot regulate “self-insured” plans, which are common among employers, leaving that authority solely to the federal government.
Moreover, the proposed state legislation often lacks clarity on what constitutes adequate human oversight of AI decisions. “Over time, humans tend to become a little lazy and simply sign off on any suggestions by a computer,” Schwarcz cautioned.
Insurers view the wave of proposed regulations as a significant challenge. Dan Jones, senior vice president for federal affairs at the Alliance of Community Health Plans, remarked that regulatory burdens detract from their primary mission of ensuring patient access to care.
In Rhode Island, Democratic state senator Linda Ujifusa noted that insurers opposed her bill to limit AI in coverage denials, which passed in one chamber but failed in another. “There’s tremendous opposition to anything that regulates tactics such as prior authorization,” she said.
In a letter opposing the bill, the insurer trade group AHIP called for “balanced policies that promote innovation while protecting patients.”
“Health plans recognize that AI has the potential to drive better health care outcomes,” said AHIP spokesperson Chris Bond, advocating for a “consistent, national approach anchored in a comprehensive federal AI policy framework.”
Seeking Balance
In California, Newsom has enacted laws regulating AI, including one that mandates health insurers ensure their algorithms are applied fairly. However, he has vetoed broader legislation that would impose more stringent requirements on AI technology.
According to lobbyist Chris Micheli, Newsom aims to maintain a balance that keeps California’s economy thriving while also providing consumer protections. “He’s trying to ensure that financial spigot continues,” Micheli said, noting that insurers already feel burdened by existing regulations.
The Trump administration appears to support this regulatory pushback. The recent executive order proposes to challenge and restrict federal funding for states enacting what it deems “excessive” regulations, with exceptions for policies protecting children.
However, this order may face constitutional challenges, as health policy scholar Carmel Shachar points out that preemption authority typically lies with Congress, which has previously declined to restrict state regulation of AI.
Some lawmakers are skeptical of Trump’s order, arguing that it removes necessary safeguards. “The question is, should it be state or not at all?” Bores concluded.
By Darius Tahir and Lauren Sausser
KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.
February 18, 2026
KFF Health News: Red and Blue States Alike Want To Limit AI in Insurance. Trump Wants To Limit the States.
In a rare display of bipartisan concern, Republican Governor Ron DeSantis of Florida and the Democratic leadership in Maryland are joining forces against President Donald Trump and California Governor Gavin Newsom on the contentious issue of artificial intelligence (AI) in health insurance. The question at hand is how health insurers should utilize AI, a topic that is increasingly becoming a political flashpoint.
Proponents of AI, led by Trump, are advocating for its integration into government systems, such as Medicare’s AI pilot program for prior authorization. However, they are also attempting to thwart state-level regulations aimed at curbing AI’s influence. A December executive order from Trump seeks to preempt most state efforts to regulate AI, framing it as a race for technological supremacy.
“To win, United States AI companies must be free to innovate without cumbersome regulation,” the order states, emphasizing that “excessive State regulation thwarts this imperative.”
In response, several states are pushing back. Last year, Arizona, Maryland, Nebraska, and Texas enacted laws to limit AI’s role in health insurance, following similar actions in Illinois and California the previous year. Rhode Island legislators are also planning to revisit a bill aimed at collecting data on AI usage, while North Carolina’s proposed legislation would prevent insurers from using AI as the sole basis for coverage decisions.
DeSantis has introduced an “AI Bill of Rights,” which includes provisions to restrict AI’s use in processing insurance claims and mandates that state regulatory bodies inspect algorithms. “We have a responsibility to ensure that new technologies develop in ways that are moral and ethical,” he stated during his State of the State address in January.
Ripe for Regulation
Public sentiment is wary of AI, with a December poll from Fox News revealing that 63% of voters are “very” or “extremely” concerned about AI. This concern spans both political parties, with nearly two-thirds of Democrats and just over 60% of Republicans expressing apprehension.
Moreover, the tactics employed by health insurers to control costs have raised alarms. A January poll from KFF found widespread dissatisfaction with issues like prior authorization. Investigative reporting from ProPublica and other outlets has highlighted how algorithms are used to swiftly deny claims or prior authorization requests, often with minimal oversight from medical professionals.
Last month, the House Ways and Means Committee summoned executives from major health insurers like Cigna and UnitedHealth Group to address affordability concerns. When questioned, these executives either denied or sidestepped inquiries regarding the use of advanced technology in claim denials.
Cigna CEO David Cordani asserted, “AI is never used for a denial,” while the company faces lawsuits over its claims denial practices. Meanwhile, Optum, a subsidiary of UnitedHealth Group, announced on February 4 that it is implementing tech-driven prior authorization, emphasizing quicker approvals.
Despite this, some legislators, like New York Assembly member Alex Bores, argue that AI is an area ripe for regulation. “Many people find the answers from their insurance companies inscrutable,” he noted, adding that adding an unexplainable layer of AI could complicate matters further.
Support for regulation is also coming from the medical community. The American Medical Association has expressed its backing for state regulations that demand greater accountability and transparency from insurers using AI in prior authorization requests. CEO John Whyte pointed out that AI is already in use, yet doctors still face delays and opaque decisions from insurers.
Insurers Push Back
With legislation either approved or pending in at least nine states, the impact of these laws remains uncertain. University of Minnesota law professor Daniel Schwarcz notes that many state laws cannot regulate “self-insured” plans, which are common among employers, leaving that authority solely to the federal government.
Moreover, the proposed state legislation often lacks clarity on what constitutes adequate human oversight of AI decisions. “Over time, humans tend to become a little lazy and simply sign off on any suggestions by a computer,” Schwarcz cautioned.
Insurers view the wave of proposed regulations as a significant challenge. Dan Jones, senior vice president for federal affairs at the Alliance of Community Health Plans, remarked that regulatory burdens detract from their primary mission of ensuring patient access to care.
In Rhode Island, Democratic state senator Linda Ujifusa noted that insurers opposed her bill to limit AI in coverage denials, which passed in one chamber but failed in another. “There’s tremendous opposition to anything that regulates tactics such as prior authorization,” she said.
In a letter opposing the bill, the insurer trade group AHIP called for “balanced policies that promote innovation while protecting patients.”
“Health plans recognize that AI has the potential to drive better health care outcomes,” said AHIP spokesperson Chris Bond, advocating for a “consistent, national approach anchored in a comprehensive federal AI policy framework.”
Seeking Balance
In California, Newsom has enacted laws regulating AI, including one that mandates health insurers ensure their algorithms are applied fairly. However, he has vetoed broader legislation that would impose more stringent requirements on AI technology.
According to lobbyist Chris Micheli, Newsom aims to maintain a balance that keeps California’s economy thriving while also providing consumer protections. “He’s trying to ensure that financial spigot continues,” Micheli said, noting that insurers already feel burdened by existing regulations.
The Trump administration appears to support this regulatory pushback. The recent executive order proposes to challenge and restrict federal funding for states enacting what it deems “excessive” regulations, with exceptions for policies protecting children.
However, this order may face constitutional challenges, as health policy scholar Carmel Shachar points out that preemption authority typically lies with Congress, which has previously declined to restrict state regulation of AI.
Some lawmakers are skeptical of Trump’s order, arguing that it removes necessary safeguards. “The question is, should it be state or not at all?” Bores concluded.
By Darius Tahir and Lauren Sausser
KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.
