More States Restrict AI in Health Insurance Decisions
Several additional states passed laws limiting AI in health insurance this week.
Why it matters: Legal advisors to health insurers and AI companies must navigate a growing patchwork of state regulations affecting AI governance and compliance risks.
- At least 24 states plus D.C. have adopted the NAIC Model Bulletin or similar AI insurance guidance as of early 2026.
- Seven states enacted 25 new AI-related laws in the first three months of 2026; 27 more bills await governors' approval.
- By March 2026, 45 states introduced 1,561 AI-related bills covering areas like algorithmic accountability and generative AI.
- The House passed the KIDS Act, which may preempt some state AI laws, complicating regulatory compliance.
As AI technologies increasingly impact healthcare and insurance, states are moving swiftly to regulate their use, particularly in health insurance decision-making. This year, at least 24 states and the District of Columbia have adopted the NAIC Model Bulletin or substantially similar frameworks addressing AI use in insurance.
In the first quarter of 2026 alone, seven states enacted 25 new AI-related laws, with another 27 bills passing both legislative chambers and pending governors' signatures, according to JDAI Consultants. Furthermore, by March, 45 states introduced a combined total of 1,561 AI-related bills targeting various issues from algorithmic accountability to the regulation of generative AI, as tracked by Multistate.ai.
States have been particularly active in regulating AI in healthcare since 2024, extending laws governing clinical decision-making and patient care through 2026. This regulatory momentum is forcing health insurers and technology companies to reassess compliance frameworks and governance policies related to AI.
Complicating the regulatory landscape, the U.S. House of Representatives recently passed the KIDS Act, focusing on children's online safety but including provisions that could preempt certain state AI laws. While some lawmakers, such as Ranking Member Frank Pallone, emphasize states' rights to enforce stronger laws, this federal initiative adds uncertainty about the ultimate scope of state regulatory authority over AI.
Legal professionals advising health insurers and AI vendors must closely monitor these overlapping state and federal developments to manage compliance risks and counsel clients through an evolving regulatory environment that touches on prior authorizations, claims processing, and clinical decisions.
By the numbers:
- 24 states plus D.C. — adopted NAIC Model Bulletin or similar as of early 2026
- 7 states — enacted 25 new AI-related laws in first three months of 2026
- 45 states — introduced 1,561 AI-related bills by March 2026
Yes, but: The KIDS Act may preempt some state AI-related laws, potentially limiting state regulation scope despite widespread legislative activity.
What's next: Governors in 27 states are expected to sign or veto recent AI legislation; federal Senate debate on the KIDS Act could further affect state AI law enforcement.