
Your 18-year-old daughter, who is struggling with severe anorexia, desperately needs a higher level of care. Biologically, her organs are failing. You make a claim with your health insurance company. And you receive a denial.
You quickly research and then discover an Ai program utilized by the insurance company made the decision to deny saving your daughter’s life.
Welcome to the world in which we live. Where Ai programs may be making life and death decisions about your loved ones. That is the very harsh reality. So, let’s explore that reality.
First, what is “artificial intelligence?” The term itself is so vague as to be mystifying. What makes it artificial? The fact that human beings invented it? That it is silicone based instead of carbon based? Is the programmed intelligence, which is designed to learn at a rate far faster than humans can possibly comprehend, deemed artificial because it lacks a sentient existence?
Is Ai artificial because whereas it may “learn,” it does not experience the subtle nuances and life experiences which make us all unique? Does Ai have a soul? For that matter, do we?
Regardless, with Ai still being in an early stage of development, and with Ai’s developing interaction with humans, we must find ways to build guard rails so that Ai is not in a position where it could singularly make life and death decisions. Decisions which are often made by health insurance companies when deciding to pay, or not pay, for life saving surgeries or treatment. Or is it already too late?
Imagine if you will, an Ai program being utilized, without human interaction, to review and decide a claim or an appeal of a claim for a higher level of care, or to receive necessary treatment or to receive a life-saving procedure. An Ai program with no human experiences, no ethics, no soul, no subtlety, no morality. To leave our very existence in the hands of a machine, a machine that cannot love, cannot experience sorry, or joy, or happiness, or despair. And yet … that is happening. Today.
In 2020, UnitedHealth Group division Optum acquired naviHealth and its algorithm for predicting care, called nH Predict, which UnitedHealth uses and contracts out to other insurers, including Humana. Multiple industry sources estimate that Optum paid at least $1.1 billion dollars and when considering debt and related financial structuring—the purchase price is estimated to be as high as $2.5 billion. When asked by the Guardian, a spokesperson for UnitedHealth Group denied that the algorithm is used to make coverage decisions. [Like when UBH denied it ran its guidelines through its accounting and finance departments?]
UnitedHealth, Humana and Cigna are facing class action lawsuits alleging the insurers unethically relied upon Ai generated algorithms to deny lifesaving care.
One of the lawsuits alleges that Cigna denied more than 300,000 claims in a two-month period. This equates to spending approximately 1.2 seconds for each presumably physician-reviewed claim. Such a practice is aided by algorithms, the lawsuit alleged.
The Cigna lawsuit also alleged that nH Predict had a 90% error rate, meaning nine out of 10 denials were reversed upon appeal – but that vanishingly few patients (about 0.2%) appeal their denied claims, leading them to pay bills out of pocket or forgo necessary treatment.
Appealing denied claims means big business. The US Centers for Medicare and Medicaid Services estimate that when insureds appeal initial denials administrative costs for insurance providers exceed $7.2 billion annually.
According to a United States Senate Report issued in October 2024, UnitedHealthcare, CVS and Humana – the three largest providers of Medicare Advantage, together provide almost 60% of all Medicare Advantage coverage – but reject prior authorization claims at higher rates using technology and automation. That report can be found here:
To support the implementation of Ai, health insurance companies argue that Ai programs streamline claims processing, more effectively flag fraud, and promise greater speed, efficiency and cost savings. They claim that by automating routine claims, Ai frees up human reviewers to focus on complex or borderline cases that require medical judgment and nuance. (For that matter, don’t all claims require medical judgment?)
Despite its alleged advantages in claims processing, Ai has faced fierce criticism, especially when its role extends to denying coverage or appeals for essential care. Ai is not immune to flaws, as its decisions depend on data quality and programming — both of which can perpetuate mistakes or systemic biases. Garbage in Garbage out.
Many Ai systems operate opaquely, leaving patients, providers, and even insurers unsure how specific decisions are made. This undermines trust and impedes meaningful appeals.
Numerous lawsuits allege that Ai tools prioritize cost-saving over medical necessity. In some cases, Ai has overridden physician recommendations, resulting in denials of rehabilitation, mental health services, or life-saving treatments.
There is a widespread perception—and often a harsh reality—that health insurers prioritize profits above the needs of their insureds. Ai tools, by automating denials or aggressively limiting coverage, can exacerbate this distrust, especially when decisions feel impersonal or unjust.
Critics argue that Ai systems are often deployed as “rubber stamps,” with little or no meaningful physician review—contravening legal and ethical obligations.
Meanwhile, states like California have moved to ban Ai-only coverage denials, signaling a wave of regulatory intervention.
As for those health insurance companies which utilize Ai alone to decide claims or appeals, the major issues focus on:
Risk of Profit-Driven Bias: Ai tools influenced by financial priorities may embed cost-saving incentives that override medical necessity, echoing problems revealed in the Wit v. UBH case.
Lack of Clinical Nuance: Ai lacks the ability to fully understand complex medical contexts or patient histories that human clinicians evaluate.
Transparency and Accountability: Patients have a right to clear explanations and meaningful appeals, which Ai-alone systems often fail to provide.
But that is where we are. Ai is being utilized by insurance companies to decide claims and appeals. Although the insurance companies may deny this fact, it is a reality. Especially since widespread use of Ai in denying claims and appeals will result in much greater profits for these companies.
To counter this reality, the future must be shaped by the following:
Stronger Regulatory Frameworks
States and potentially federal regulators are developing rules to ensure Ai complements—not replaces—human medical judgment. Requirements for physician involvement, transparency, and appeal rights are expected to expand.
Increased Legal Scrutiny
As lawsuits proceed, courts will clarify the legal boundaries of Ai’s role in coverage decisions, particularly under ERISA, Medicare Advantage rules, and consumer protection laws.
Pressure for Transparency and Explainability
Insurers may face mounting demands to disclose how Ai tools function, how decisions are made, and how patients can challenge automated denials.
Smarter, More Ethical Ai Development
Future Ai systems may incorporate safeguards to avoid wrongful denials, improve alignment with medical standards, and enhance explainability.
Ai’s exploding involvement, or interference in our lives will only increase. That is inevitable.
There is the potential that Ai can make health insurance claims processing faster, fairer, and more efficient—but only if deployed responsibly. It must address not only human fallibility but also the systemic distrust stemming from the reality that insurers prioritize profits over patients. Lessons from Wit v. UBH remind us that financial influence over clinical decisions can have devastating consequences, a cautionary tale for Ai implementation.
As courts, lawmakers, and the public demand accountability, the health insurance industry faces a pivotal choice: embrace Ai as a tool to support—not supplant—human expertise, or risk eroding trust and facing costly legal consequences.
The future of Ai in health insurance is not just a technological issue—it is a legal, ethical, and societal issue. Right now, the live of your loved one may very well depend on a machine. On Ai. A lifeless, soulless computer program devoid of all emotion, mercy and humanity.
That is our reality right now. Allow yourself to contemplate that reality and perhaps yes, be afraid. For our future depends on wisdom far greater than humanity has ever demonstrated. Our health depends on it. Our very lives depend on it.































