A new study from PricewaterhouseCoopers suggests the use of artificial intelligence in medical documentation and insurance billing is helping hospitals capture more revenue—and putting massive new financial pressure on insurers.
According to the PwC report, commercial healthcare costs for employer-sponsored group plans are projected to rise by 9% in 2027, marking the highest projected medical cost trend in 17 years. For the individual market, costs are projected to grow by 8.5%.
A major catalyst for this inflation is the deployment of AI-enabled coding tools by healthcare providers. Nearly 70% of the health plans surveyed by PwC ranked the use of these AI tools as a top-three driver of escalating costs, with roughly 20% identifying AI as the single largest inflationary trend.
These AI systems meticulously capture patient interactions, allowing providers to record greater specificity, diagnoses, and comorbidities. This enables hospitals and clinics to code visits at a higher reimbursable severity, generating increased per-claim payments without any proportionate increase in the actual intensity of care provided.
The PwC survey, which interviewed actuaries representing 27 U.S. health plans and over 103 million employer-sponsored members, noted that AI is not acting alone. Hospital service inflation spiked to 7.59% in early 2026, and behavioral health utilization has surged 62% since 2018.
This AI-driven medical inflation is spilling directly into the auto casualty sector. The Enlyte Envision Trends Report 2026 reveals that auto casualty medical claims experienced a 10.5% cost increase between 2022 and 2025. Auto insurers are facing the exact same AI billing pressures, dealing with highly complex, heavily documented files that are driving bodily injury claim severities higher despite stable treatment durations.
Ironically, these surging casualty costs are occurring as crash outcomes are improving. According to the National Highway Traffic Safety Administration’s Crash●Stats DOT HS 813 800 early estimates, traffic fatalities dropped by 6.7% in 2025 to an estimated 36,640 people.
The NHTSA reported that the fourth quarter of 2025 represented the 15th consecutive quarterly decline in fatalities. Because vehicle miles traveled increased by 0.9% during the year, the national fatality rate fell to 1.10 per 100 million miles—the second-lowest rate ever recorded in the history of the Fatality Analysis Reporting System.
Furthermore, 39 states and all 10 NHTSA regions experienced a decrease in fatalities in 2025.However, the vehicle technology responsible for this drop in fatalities is creating its own financial strain. The Mitchell collision data inside the Enlyte report shows that ADAS are significantly driving up physical damage severity.
In 2025, the share of repair estimates requiring an ADAS calibration grew 31.4% year-over-year.Calibrations now appear on 34.7% of all estimates, up from just 12.1% in 2022. When required, an ADAS calibration adds an average of $688 to the total repair cost.The collision and auto insurance industries are now navigating a complex economic paradox.
