A BILL TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY ADDING SECTION 38-71-292 AND SECTION 38-71-820 BOTH SO AS TO DEFINE TERMS AND OUTLINE THE APPLICABILITY AND REQUIREMENTS FOR COST SHARING FOR INSURERS; BY ADDING SECTION 38-71-2270 SO AS TO DEFINE TERMS AND OUTLINE THE APPLICABILITY AND REQUIREMENTS FOR COST SHARING FOR PHARMACY BENEFIT MANAGERS; AND BY AMENDING SECTION 38-71-2200, RELATING TO DEFINITIONS CONCERNING PHARMACY BENEFITS MANAGERS, SO AS TO MAKE CONFORMING CHANGES.
H3575 would amend South Carolina insurance law to require health plans and pharmacy benefit managers to apply the federal annual limit on cost sharing to all covered healthcare services, including prescription drugs, under health plans offered or issued in the state. The bill defines key terms such as cost sharing, enrollee, health plan, healthcare service, insurer, and pharmacy benefits manager, and it directs that when an enrollee’s out-of-pocket spending is counted toward a cost-sharing requirement, amounts paid by the enrollee or on the enrollee’s behalf must be included.
The bill also addresses prescription drug coverage by limiting an insurer’s ability to exclude brand-name drugs when a medically appropriate generic equivalent exists, unless the enrollee has obtained access through prior authorization, step therapy, appeals, or another specified process. It further prohibits insurers from setting or conditioning coverage terms based on the availability or amount of manufacturer financial assistance for a prescription drug. The new requirements would apply to health plans entered into, amended, extended, or renewed on or after January 1, 2027, and the Department of Insurance would be authorized to adopt rules to implement the law.
If enacted, the bill would expand and clarify how cost-sharing limits are applied in South Carolina health plans, including plans administered by pharmacy benefit managers, and would require insurers to count third-party assistance toward an enrollee’s out-of-pocket accumulation. It would also make conforming changes to the state’s pharmacy benefit manager definitions and regulatory framework in Title 38, Chapter 71, which could affect insurers, PBMs, pharmacies, employers sponsoring plans, and consumers using prescription drug coverage. The bill is written to operate only to the extent allowed under federal law, and its practical effect would begin with plan years or renewals on or after January 1, 2027.
Based on the bill text and available context, the measure appears to be framed as a consumer-protection and prescription-drug affordability bill, with an emphasis on reducing out-of-pocket costs and preventing coverage decisions from being influenced by manufacturer assistance programs. No committee transcript or vote record is available here, so there is no recorded debate or formal vote history to indicate broader legislative support or opposition. The overall tone of the bill is policy-driven and technical rather than partisan.
The main points of potential contention are likely to be the requirements that insurers and PBMs count third-party payments toward cost-sharing limits and the prohibition on using drug manufacturer assistance information in benefit design. Insurers and pharmacy benefit managers may view these provisions as affecting plan design, pricing, and administration, while consumer advocates and patients are likely to support them as protections against high prescription drug costs. Another possible issue is the interaction with federal law, especially Health Savings Account-qualified high-deductible health plans and the bill’s express limitation to what is permissible under applicable law.