AN ACT to amend Tennessee Code Annotated, Title 4; Title 8; Title 10; Title 53; Title 56; Title 63; Title 68 and Title 71, relative to pharmacy benefits.
HB0870 revises Tennessee law governing pharmacy benefits and health plan cost-sharing. The bill defines key terms such as health plan, healthcare service, insurer, and third-party administrator, and then updates the rules for how enrollee cost-sharing is calculated. In general, insurers must count cost-sharing amounts paid by or on behalf of an enrollee toward applicable cost-sharing requirements, subject to federal health savings account rules and an exception for certain brand-name drugs when a generic alternative exists unless the enrollee has gone through prior authorization, step therapy, appeals, or a statutory exception process.
The bill also extends the annual cost-sharing limitation under federal Affordable Care Act rules to all healthcare services covered under a Tennessee health plan. In addition, it prohibits insurers, pharmacy benefit managers, and third-party administrators from directly or indirectly designing or conditioning health plan coverage based on the availability or amount of financial assistance or product assistance for prescription drugs. The act applies only to health plans entered into, amended, extended, or renewed on or after January 1, 2026.
HB0870 would amend Tennessee Code Annotated provisions in Title 56 governing insurance and pharmacy benefits, with related references to other titles as part of the bill's scope. Its practical effect is to regulate how insurers, pharmacy benefit managers, and third-party administrators treat third-party payments, cost-sharing accumulation, and drug assistance programs in health plan design. It would also expand the application of annual cost-sharing limits to covered healthcare services and set a future effective date for new or renewed plans, leaving existing plans unchanged until renewal or amendment after January 1, 2026.
The available voting history shows strong support for the bill in committee, with unanimous or near-unanimous favorable votes in both the Insurance Subcommittee and the House Insurance Committee. No committee transcript is provided, so there is no recorded floor or committee debate to indicate opposition. Overall, the bill appears to have been received positively at the committee stage.
The main policy tensions implied by the bill involve prescription drug pricing, the role of pharmacy benefit managers, and whether insurers may consider manufacturer or charitable assistance when designing coverage and cost-sharing rules. Supporters likely view the bill as protecting consumers from having assistance programs offset by plan design changes and as ensuring cost-sharing counts fairly toward annual limits. Potential opponents could include insurers, PBMs, or plan administrators concerned about added administrative constraints, limits on benefit design flexibility, and compliance with federal health savings account rules. However, the recorded votes do not show active committee opposition.