# Insurers say AI is driving up healthcare costs

> Hospitals using AI to code insurance claims cost the system an extra $942 million in two years, according to Blue Cross Blue Shield.
- Title: Insurers say AI is driving up healthcare costs · TechCrunch
- Summary: Hospitals using AI to code insurance claims cost the system an extra $942 million in two years, according to Blue Cross Blue Shield. The Blue Cross Blue…
- Keywords: blue cross blue shield association, artificial intelligence, healthcare costs, insurance claims, abridge, hospitals, technology, startups, Insurers, say, driving, healthcare
- Source: TechCrunch — https://techcrunch.com/2026/09/26/insurers-claim-ai-is-already-increasing-healthcare-costs
- Author: Anthony Ha
- Published: 2026-09-26T21:02:06+00:00
- Read time: 1 min
- Topics: blue cross blue shield association, artificial intelligence, healthcare costs, insurance claims, abridge, hospitals, technology, startups
## AI coding inflates insurance bills
Hospitals using artificial intelligence tools to submit insurance claims led to an additional nine hundred forty-two million dollars in healthcare spending over a two-year period, according to the Blue Cross Blue Shield Association.
## Complex conditions without better care
The Blue Cross Blue Shield Association found a sharp increase in patients documented as having complex conditions, but argued there is a clear disconnect between medical coding and treatment, with no evidence of corresponding change in care delivered.

> a clear disconnect between [medical] coding and treatment
## Latest sign of AI cost inflation
The New York Times pointed to the analysis as just the latest sign that AI is contributing to an increase in healthcare costs. While battles between hospitals and insurers over treatments and payments are nothing new, the use of AI on both sides seems to be making it worse.
## AI could cut costs or create chaos
Dr. Shiv Rao, founder of AI startup Abridge, acknowledged that AI use could lead to a horrible dystopic future with bots fighting bots and agents fighting agents, but said it might also reduce tensions and cut costs.

> a horrible dystopic future nobody wants to live in
## Insurers losing the AI arms race
Luke Chalker, the Blue Cross Blue Shield Association's senior vice president, resisted characterizing the situation as a battle, claiming instead that it is a completely one-sided blood bath with insurers on the losing side.

> It's not a war. It's a completely one-sided blood bath
## Key takeaway

The Blue Cross Blue Shield Association found hospitals used AI to document more complex conditions, raising costs by $942 million over two years without evidence of better care.