New York's Algorithmic Pricing Law Expands to Healthcare
New York requires companies to disclose when they use personal data to set prices. Since November 10, 2025, the Algorithmic Pricing Disclosure Act has mandated a clear warning whenever personalized algorithmic pricing is used: "THIS PRICE WAS SET BY AN ALGORITHM USING YOUR PERSONAL DATA."
The law applies to any entity that sets prices based on personal data and automated decision-making. Healthcare companies, insurers, telehealth platforms, and digital health services fall within its scope. Violations carry civil penalties up to $1,000 each.
The Act targets pricing that combines two elements: automation and personalization. Dynamic pricing that fluctuates based on time of day or general market conditions alone is not covered. But pricing that adjusts based on a consumer's location, shopping history, or other individual characteristics is.
How Healthcare Companies Are Affected
Insurance premium pricing: Insurers increasingly use AI models to analyze claims history, diagnostic codes, and utilization patterns to forecast costs and set premiums. If these models shift from anonymized data to individualized personal data, they may trigger disclosure requirements.
Hospital pricing: Hospitals deploy AI tools to analyze competitor rates, identify high-margin procedures, and adjust costs based on supply and demand. When third-party pricing software automates these decisions using personal data, the Act applies.
Direct-to-consumer services: Telehealth platforms, digital health subscriptions, and concierge medicine services often use AI to tailor pricing, offer individualized discounts, or adjust fees based on user engagement or personal characteristics. These practices now require disclosure.
A Growing Regulatory Trend
New York is not alone. Multiple states have introduced or passed similar legislation with different approaches:
- California: Assembly Bill 325 (effective January 1, 2026) prohibits "common pricing algorithms" in anticompetitive agreements within its antitrust law.
- Connecticut: House Bill 8002 (effective January 1, 2026) restricts algorithmic pricing in rental housing through antitrust provisions.
- Pennsylvania: Senate Bill 1205 would prohibit dynamic pricing as an unfair or deceptive practice.
- Tennessee: Senate Bill 1807 would ban personalized algorithmic pricing outright, effective July 1, 2026 if passed.
New York Attorney General Letitia James has already begun sending letters to companies about their algorithmic pricing practices, signaling active enforcement.
What Healthcare Organizations Should Do
Review your current pricing methodologies. If you use algorithms that incorporate personal data to set prices, ensure you can display the required disclaimer at the point of sale or service offer.
Monitor state and federal legislative activity. Laws vary by jurisdiction and continue to evolve. What's permitted in one state may be prohibited in another.
Audit your data inputs. Determine whether your pricing tools rely on personal data, aggregate data, or both. The distinction determines whether the Act applies.
Consider whether your pricing practices could face legal scrutiny beyond algorithmic pricing laws. Antitrust regulators and consumer protection agencies are paying closer attention to automated pricing decisions.
Healthcare organizations using AI for Healthcare should ensure pricing practices comply with both new disclosure laws and existing regulations governing fair competition and consumer protection.
Your membership also unlocks:
