Artificial Intelligence in Health Insurance: An Interagency Framework for Federal and State Oversight

Despite mounting enthusiasm regarding the introduction of artificial intelligence (AI) software as a medical device (SaMD) to clinical care and, consequently, the development of a new regulatory proposal for the federal oversight of AI/machine learning medical devices, little attention has been paid to the oversight of AI tools used by large insurers. The US Food and Drug Administration (FDA) has advanced an "Action Plan" for clinical AI governance. However, the unregulated application of insurance AI still thre…

By the Truvace deskOctober 20, 20262 min read1 sourcePeer-reviewedTRV-2026-1987· cite & verify

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In brief

A law and ethics journal article argues that regulators have focused on AI in clinical care, such as medical device software overseen by the FDA, while AI used by large insurers has received little oversight attention. It uses Medicare Advantage prior authorization as its illustrative case.

The author proposes that three federal agencies and state insurance commissioners could extend their existing jurisdiction to insurance AI. The significance is a possible shift from reacting after harm to preventing flawed tools from being deployed. The text is a policy argument, so it does not show whether the framework would work in practice.

Main points

The article contrasts the FDA's Action Plan for clinical AI governance with the lack of oversight for insurer AI.
Medicare Advantage prior authorization serves as the illustrative case for insurer AI.
The named federal agencies are the Centers for Medicare & Medicaid Services, the Office for Civil Rights, and the Office of the National Coordinator for Health Information Technology.
State insurance commissioners are identified as a state-level governance layer able to expand oversight.

The problem

AI tools used by large insurers, illustrated by Medicare Advantage prior authorization, are largely unregulated, and the author argues this threatens US healthcare delivery.

The rundown

The article begins from a gap in current governance. Enthusiasm about AI software as a medical device has prompted a federal regulatory proposal for AI and machine learning devices, but insurer-side AI tools have not received comparable attention.

The proposed framework harmonizes existing authorities, assigns clear responsibilities, establishes accountability, and creates mechanisms for continuous improvement. It is meant to respect each agency's expertise while ensuring coordination among them.

The stated aim is to move from reactive enforcement to proactive oversight. That would prevent flawed tools from being deployed in insurance pathways rather than addressing them after problems appear.