A new California law has taken aim at the increasing role of artificial intelligence in health care decision-making. Senate Bill 1120, signed by Gov. Gavin Newsom in September, now prohibits health insurance companies from relying solely on AI algorithms to deny coverage, ensuring that a human perspective remains central to each decision.
High Denial Rates Spark Calls for Reform
Despite California’s reputation for progressive health care policies, denial rates have remained high. About a quarter of all health insurance claims were denied in the state last year — reflecting a national trend that has fueled public frustration.
• More than 49 million claims were denied nationwide in 2021, according to the Kaiser Family Foundation
• Fewer than 0.2% of denied claims were appealed by policyholders
• Last month’s killing of a UnitedHealthcare executive in New York City further ignited outrage and calls for more scrutiny of health insurance practices
Key Provisions of Senate Bill 1120
Dubbed the “Physicians Make Decisions Act,” SB 1120 demands that medical professionals, not algorithms, hold the final say on whether a treatment is medically necessary.
• AI tools cannot be used to deny, delay, or alter services doctors deem necessary
• Insurers must make standard coverage decisions within five business days, and urgent cases within 72 hours
• State regulators can fine companies for missing deadlines or misusing AI in coverage decisions
Voices from the Health Care Community
Many in the medical field see the new law as a critical step toward safeguarding patients’ access to essential care.
• The California Medical Association co-sponsored SB 1120, emphasizing AI’s potential to support — not replace — physician judgment
• Nonprofit caregivers like Avenidas Care Partners report families facing immense stress when claims are denied
• Supporters of the law believe a human perspective ensures individualized patient care, preventing “one-size-fits-all” technology errors
A Possible National Blueprint
California’s bold move has captured attention well beyond state lines. With 19 other states reportedly exploring similar legislation, and multiple congressional offices expressing interest, the Golden State’s stance could shape policy across the country.
• California’s Department of Managed Health Care will oversee enforcement and transparency measures
• Penalties for noncompliance are determined by state regulators
• Lawmakers, health care advocates, and the public alike are monitoring the law’s impact
As concern grows over AI’s expanding role in crucial health care decisions, California’s SB 1120 stands as a clear statement: no algorithm alone can replace the nuanced judgment of a trained physician. And with nationwide reform on the horizon, this legislation may well be the first of many to reaffirm the importance of human empathy in health insurance.