Illinois House Bill Aims to Regulate AI in Health Insurance Coverage
In 2025, Illinois lawmakers introduced House Bill 35, which aims to regulate how artificial intelligence (AI) is used by health insurance companies when making decisions about coverage approvals, claims, and treatment authorizations. The proposed law comes amid growing concerns that algorithm-based decision-making could lead to unfair or opaque denials of care.
Key Provisions of House Bill 35
House Bill 35 would require health insurance companies to:
Disclose when AI or algorithmic tools are used in coverage or claim determinations.
Demonstrate transparency by documenting how decisions are made, especially in cases of denial or delay.
Ensure human review of any AI-based decisions that negatively affect patients.
Provide appeals processes that include access to human representatives.
The bill is designed to protect patients from being denied coverage or treatment due to automated systems that may not account for individual circumstances.
Industry Response and Concerns
While patient advocacy groups have largely praised the bill, insurance companies and some healthcare technology leaders have voiced concern. They argue that AI tools improve speed and efficiency in claims processing, and that the bill could:
Slow down approvals by requiring additional layers of review.
Increase administrative costs, which could be passed on to consumers.
Discourage innovation in predictive analytics and care coordination systems.
Still, legislators backing the bill argue that the need for transparency and accountability outweighs efficiency concerns, particularly when a patient’s access to care may be on the line.
Implications for Illinois Residents
For Illinois residents—especially those navigating the healthcare system after layoffs, disability, or serious illness—the bill could offer critical protections. If passed, patients would have greater clarity on how their claims are evaluated and stronger rights to challenge unfavorable decisions.
The proposed regulation is especially relevant to the growing number of Chicagoland residents relying on ACA plans or Medicaid alternatives, where efficient but fair processing of coverage is crucial.
Final Thoughts
House Bill 35 reflects a national conversation on the role of AI in healthcare, especially in administrative systems like insurance. As Illinois moves to potentially lead on this issue, patients and providers alike will be watching how lawmakers balance innovation with the human side of healthcare.
