On Sunday night, House Republicans on the Energy and Commerce Committee released their policy plan for achieving President Donald Trump’s policy goals, a proposal that would reduce federal spending by $912 billion between 2025 and 2034, according to the Congressional Budget Office.
Buried in the legislative text (PDF) of E&C’s budget reconciliation bill is a proposal to ban states from enforcing AI laws or regulations for the next 10 years. While not a healthcare-specific proposal, it stands to impact the healthcare AI laws that have been passed in California, Colorado and a smattering of other states in recent years.
The AI provision in the reconciliation bill would immediately halt state AI laws in their tracks. Some states have moved to regulate AI because Congress has not passed any significant AI legislation to date for healthcare.
Randi Siegal, partner at Manatt, Phelps and Phillips, said the decade-long ban could signal that Congress wants to legislate.
Industry technology advocates have praised the enforcement ban, citing its benefits for small businesses.
“We’re tracking more than 900 state AI bills. This potential surge of contradictory and overlapping policy proposals would quash small business AI innovation, most of which poses minimal risk,” said ACT | The App Association President Morgan Reed.
Gary Shapiro, CEO and vice chair of the Consumer Technology Association, also said that federal preemption of state AI law would benefit AI startups and businesses.
“I applaud E&C Committee leadership for recognizing that a patchwork approach to AI regulation hurts innovation, growth, and American competitiveness,” Shapiro said. “AI innovation doesn’t stop at state borders, and American companies—especially startups and small businesses—face huge compliance and litigation costs when AI is regulated at the state and local levels.”
If the reconciliation bill passes with the AI enforcement ban intact, the law would ban seven healthcare laws in California, four in Utah and laws in a smattering of other states on both sides of the political aisle.
Siegal noted when Colorado Governor Jared Polis signed Colorado’s AI law in 2024, “he invited the federal government to preempt this space.”
Manatt Health wrote in a blog post there has been a spike in AI laws introduced this year that would regulate how healthcare payers use AI to prevent them from using AI to automatically deny claims.
States also introduced bills to require providers to oversee AI, to require notification to patients when AI is in use and to govern AI chatbots, especially in mental health.
“There has been industry support for the federal government to preempt the space so that innovators do not have to navigate a complex web of state law when developing and deploying artificial intelligence, like they have under state consumer privacy laws or telehealth laws,” Siegal wrote in an email.
