Health Plans Warn AI Could Contribute to Rising Healthcare Costs

A new report from PwC predicts that commercial healthcare costs will increase by 9% in 2027, marking the highest projected medical cost trend in nearly two decades. While rising labor expenses, increased healthcare utilization, and higher pharmaceutical spending remain the main contributors, health plans are increasingly concerned about the impact of artificial intelligence (AI) on healthcare costs.

Nearly 70% of surveyed health plans identified providers’ use of AI-powered documentation and coding tools as one of the top three factors driving cost inflation, and about one in five considered it the leading contributor. These technologies enable clinicians to capture more diagnoses and comorbidities, allowing for more accurate and complex billing that can result in higher reimbursement, even when the underlying treatment remains unchanged.

Other factors contributing to higher costs include provider consolidation, growing demand for behavioral health services, and increased spending on high-cost medications such as GLP-1 drugs. In addition, the Independent Dispute Resolution process established under the No Surprises Act has generally favored providers, further increasing expenditures.

Despite these challenges, experts believe AI could eventually help reduce healthcare spending by improving efficiency and decreasing administrative burdens.

Olsen, E. (2026, June 11). Health plans say AI is pushing healthcare costs higher. Healthcare Dive. https://www.healthcaredive.com/news/ai-push-healthcare-costs-higher-health-plans-say-pwc/822645/