Health Care Coverage Is Now Decided by AI—Here's What You Need to Know About Its Role in Insurance

Artificial intelligence is increasingly being used to determine health care coverage in the United States, from prior authorisation for medical procedures to insurance claims approval.

Patients and policyholders could face denials that involve limited human oversight. In Florida, a state prone to natural disasters and high insurance premiums, there are currently no regulations specifically addressing AI in insurance.

The technology has already become a point of legal and regulatory concern, as illustrated by a class-action lawsuit against UnitedHealth Group alleging that an algorithm contributed to the denial of nursing home care.

How AI Is Applied in Insurance

A 2024–25 survey by the National Association of Insurance Commissioners found that 84 percent of health insurers use AI for sensitive processes, including prior authorisation and fraud detection.

Property and auto insurers are also adopting AI, with 70% of property insurance companies and 88% of auto insurers either using AI or planning to do so. AI systems promise faster processing times, sometimes reducing tasks that traditionally take 30 to 60 minutes to just two to three minutes.

The technology is designed to comply with insurance regulations while streamlining paperwork-heavy procedures.

Medicare Pilot Programmes and Prior Authorisation

A six‑state pilot programme known as the Wasteful and Inappropriate Service Reduction Model, or WISeR, began in January 2026 to test AI‑assisted prior authorisation for traditional Medicare enrollees.

The initiative aims to reduce waste and prevent clinically unsupported care. As reported by The Palm Beach Post, critics of the pilot warn that it could lead to increased denials and reduced access to medically necessary procedures when automated systems are used without strong human oversight.

Traditional Medicare recipients have historically experienced fewer denials than those in Medicare Advantage plans, but the pilot could change how prior authorisation is conducted in fee‑for‑service public insurance. The six states involved are New Jersey, Ohio, Oklahoma, Texas, Arizona, and Washington.

Legislative and Industry Response

Florida lawmakers have debated the role of AI in insurance. A bill requiring all claim denials to involve human review passed the House but failed in the Senate.

State Representative Hillary Cassel, who sponsored the legislation, emphasised that any denial should be reviewed by a qualified human professional who verifies AI-generated information.

Insurance industry representatives have argued that AI improves efficiency while maintaining compliance with state regulations, noting that insurers remain legally responsible for claims regardless of whether AI is used in the process.

Real-World Impacts and Conflicts

Conflicts over AI in claims have emerged between insurers and health care providers. For example, Tenet Healthcare, which operates several hospitals in Florida, raised concerns over AI-assisted claim denials by Cigna, a national insurer.

The contract dispute was resolved before the deadline, but it highlighted the potential for tension between providers and insurers when AI is involved.

Patients such as Iris Smith, an 80-year-old retiree from Delray Beach, have expressed concern about AI making decisions on treatment approvals, noting that traditional Medicare coverage offers more predictable access to care.

Expert Perspectives

Experts note that the integration of AI in insurance is part of a broader trend in the private sector. Gabriel Carrillo, programme director at the University of Central Florida College of Business, stated that state-level regulation may be appropriate for property and casualty insurance, while Florida's approach to health care AI remains unsettled.

Evan Saltzman, a Florida State University professor in risk management and insurance, described the pilot programmes as an inevitable extension of practices already common in the private sector.

Lawmakers such as US Representative Lois Frankel have voiced opposition to expanding AI in prior authorisation, emphasising patient protection.

Monitoring and Oversight

AI adoption in health care and insurance continues to accelerate, with regulators, advocacy groups, and lawmakers monitoring developments.

The technology is being implemented to improve efficiency and reduce waste, but questions remain about the balance between speed, accuracy, and human oversight in decisions that affect patient access to care and financial responsibility.