Rapid technological developments in artificial intelligence (AI) have resulted in growing public attention to the potential benefits and challenges of these developments as they relate to health care. The Trump administration recently released A National Policy Framework for Artificial Intelligence (“AI Framework”), a set of legislative recommendations that could jump-start congressional activity on the application of AI across a variety of policy areas, not just health care. A core part of the AI Framework emphasizes establishing federal AI policy that preempts many state AI laws to reduce barriers for deploying AI applications. Preemption could nullify state consumer protections governing the use of AI in health coverage, such as prior authorization, and claims review and appeals. This Issue Brief discusses the types of consumer protections for use of AI in prior authorization and claims review, describes the Trump administration’s AI Framework, and highlights areas to watch as Congress considers AI legislation.

In 2026, states will begin implementing provisions from the 2025 reconciliation law that made historic reductions in federal Medicaid funding. Medicaid changes are expected to increase the number of people without health insurance by 7.5 million in 2034. While not a direct focus of many changes in the new law, changes in the law could have implications for older adults and people with disabilities who comprise 1 in 5 Medicaid enrollees but over half of Medicaid spending on account of higher per-person costs. Within this group, there are multiple eligibility pathways, most of which are optional for states to cover, and all of which have more complex eligibility requirements than coverage for other enrollees. (Other enrollees such as children, pregnant women, and people covered under the Affordable Care Act are eligible based on Modified Adjusted Gross Income (MAGI). Eligibility based on being ages 65 and older or having a disability is sometimes referred to as “non-MAGI” eligibility.) Changes in the law may pressure states to restrict optional Medicaid eligibility or benefits or reduce provider payment rates.

By the beginning of 2025, states had largely resumed more routine Medicaid enrollment operations following the unwinding of pandemic-era continuous enrollment provisions but with numerous reforms in place to streamline renewal processes and bolster enrollee communications. However, the passage of the 2025 reconciliation law in July 2025 introduced significant Medicaid eligibility and enrollment changes. Starting in January 2027, states that adopted the Medicaid expansion in the Affordable Care Act (ACA) along with Georgia and Wisconsin (states that expanded adult coverage through a waiver) must implement work/community engagement requirements (referred to as work requirements in this report) for the expansion or waiver populations. Expansion states must also shift to more frequent semi-annual renewal periods for expansion enrollees and impose cost-sharing on all nonexempt services on expansion enrollees with incomes between 100% and 138% of the federal poverty level (FPL). Other changes in the law affect all states, such as the elimination of eligibility for certain lawfully residing immigrants. The law also delays for 10 years enforcement of many changes included in a 2024 regulation that aimed to simplify eligibility and enrollment (Box 1). In part tied to federal Medicaid financing changes in the law, states also face more tenuous state budget conditions that could lead to further eligibility restrictions and reductions in benefits and provider rates as they seek to reduce spending on Medicaid.