By: TAHP | Thursday, October 3, 2024

The Big Picture: Health insurers are increasingly and cautiously utilizing artificial intelligence (AI) to modernize their operations, improving efficiency and customer service. Yesterday, TAHP testified before the Texas Legislature, urging caution in efforts to regulate AI. As a highly regulated industry, health insurance already operates under stringent oversight, and any new AI regulations should be built within the existing Texas Department of Insurance (TDI) framework to avoid unnecessary complexity and conflicting requirements.

Go Deeper: Read TAHP’s written testimony submitted to the House Select Committee on Artificial Intelligence & Emerging Technologies at this week’s hearing. Plus, check out our full recap of the hearing.

The Numbers Don’t Lie: 

• 25% faster: Health plans have reported that AI reduces response times for prior authorization requests by up to 25%. 
• 1,400 times faster: AI can accelerate real-time approvals for prior authorizations up to 1,400 times faster than traditional methods. 
• 25% lower administrative costs: AI-driven automation can reduce administrative costs by up to 25%, leading to potential savings for consumers.

Why It Matters: AI is one of many tools insurers use to enhance affordability, streamline care coordination, and ensure timely access to benefits. However, overregulation of AI could disrupt these advancements. Any regulation should fit into the existing TDI oversight framework, avoiding duplication or conflicting requirements that could hinder innovation. It’s crucial to strike a balance that allows insurers to continue using AI effectively without creating unnecessary burdens.

Taking Action: TAHP is calling for AI regulation that:

• Builds within the current regulatory framework overseen by TDI and ensure any new AI regulations avoid duplicative or conflicting requirements.
• Utilize standard definitions and a risk-based approach that focuses on higher-risk AI applications.
• Ensures that innovation isn’t stifled by unnecessary restrictions.

Situational Awareness: Several states, such as Connecticut and Colorado, have taken a cautious approach to regulating AI, specifically deferring to their insurance regulators and existing statutes to oversee AI. By integrating AI regulation into existing oversight structures, Texas can promote innovation while ensuring consumer protections.

The Bottom Line: AI is enhancing efficiency and reducing administrative tasks in the health insurance industry. Any legislative efforts around AI should first recognize where regulatory structures today can account for AI and ensure innovation can flourish. TAHP is committed to working with policymakers to ensure AI continues benefiting Texans while upholding strong regulatory oversight.