IndianaHB 1604First Regular Session 124th General Assembly (2025)HouseWALLET

Cost sharing; out-of-pocket expense credit.

Sponsored By: Julie McGuire (Republican)

Signed by Governor

Summary

Requires an insurer, an administrator, and a pharmacy benefit manager to apply the annual limitation on cost sharing set forth in the federal Patient Protection and Affordable Care Act under 42 U.S.C. 18022(c)(1) to prescription drugs that: (1) are covered under a health plan; (2) are life-saving or intended to manage chronic pain; and (3) do not have an approved generic version. Provides that an insurer, an administrator, and a pharmacy benefit manager may not directly or indirectly set, alter, implement, or condition the terms of health insurance coverage based in part or entirely on information about the availability or amount of financial or product assistance available for a prescription drug. Requires, before December 31 of each year, each insurer and administrator to certify to the insurance commissioner that the insurer or administrator has fully and completely complied with the cost sharing requirements during the previous calendar year. Requires a health plan to credit toward a covered individual's deductible and annual maximum out-of-pocket expenses any amount the covered individual pays directly to any health care provider for a medically necessary covered health care service if a claim for the health care service is not submitted to the health plan and the amount paid by the covered individual to the health care provider is less than the average discounted rate for the health care service paid to a health care provider in the health plan's network. Requires a health plan to: (1) establish a procedure by which a covered individual may claim a credit; and (2) identify documentation necessary to support a claim for a credit.

insurancethe senateinsurance and financial institutions

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Bill Overview

Analyzed Economic Effects

4 provisions identified: 3 benefits, 0 costs, 1 mixed.

Patient payments and drug assistance protected

Beginning January 1, 2026, insurers, administrators, and pharmacy benefit managers must count cost-sharing payments made by you or for you. Cost sharing includes copays, coinsurance, deductibles, and similar required charges. They cannot base coverage terms or benefit design on the availability or amount of prescription financial or product assistance. For high-deductible plans, amounts that threaten health savings account eligibility count toward the deductible only after the minimum deductible is met. Preventive care is exempt from that condition. These rules cover policies issued, delivered, amended, or renewed after December 31, 2025, excluding self-funded employer plans governed by ERISA. Insurers and administrators must certify compliance annually before December 31 for the prior calendar year, with the CEO or CFO signing.

Yearly spending protection for certain prescriptions

Beginning January 1, 2026, insurers, administrators, and pharmacy benefit managers must apply the federal yearly cost-sharing limit to qualifying prescriptions. Drugs must be covered, be life-saving or treat chronic pain, and have no approved generic version. The law uses the Affordable Care Act limit rather than setting a new dollar cap. An exception protects health savings account eligibility: plans apply the required minimum deductible when the limit would cause ineligibility. Preventive care remains subject to the limit. These rules cover policies issued, delivered, amended, or renewed after December 31, 2025, and exclude self-funded employer plans governed by ERISA.

Direct medical payments count toward deductibles

Beginning July 1, 2025, qualifying direct payments count toward your deductible and yearly out-of-pocket limit. This applies to health plans entered into or renewed after June 30, 2025. You must pay the provider directly for a medically necessary service covered by your plan. No claim for the service can be submitted, and your payment must be below the plan’s average discounted network rate. Plans must establish a credit process and post instructions, required documents, and a link to Indiana’s all-payer claims database. Plans can use database rates as benchmarks, and you can use those figures when requesting credit.

Broader oversight for pharmacy benefit companies

Beginning January 1, 2026, Indiana’s pharmacy benefit manager rules cover more companies providing services under written agreements with health payors. Related agents, contractors, affiliates, and intermediaries that provide or oversee those services are also covered. Certain licensed health care providers and advice-only consultants are excluded. The Department of Insurance can require licenses and set financial, reporting, audit, and market-conduct rules. Application and renewal fees are capped at $500, go to the department’s fund, and audits are limited to once yearly. Financial information submitted by these companies is confidential under the law.

Sponsors & Cosponsors

Sponsor

Julie McGuire
Republican • House

Cosponsors

Aaron Freeman
Republican • Senate
Andrea Hunley
Democratic • Senate
Cyndi Carrasco
Republican • Senate
Fady Qaddoura
Democratic • Senate
J.D. Ford
Democratic • Senate
Joanna King
Republican • House
Kyle Walker
Republican • Senate
Linda Rogers
Republican • Senate
Lonnie Randolph
Democratic • Senate
Mike Bohacek
Republican • Senate
Robert Morris
Republican • House
Robin Shackleford
Democratic • House
Shelli Yoder
Democratic • Senate

Roll Call Votes

All Roll Calls

Yes: 275 • No: 5

House vote • 4/23/2025

Rules Suspended. Conference Committee Report 1: adopted by the House

Yes: 91 • No: 0

Senate vote • 4/23/2025

Conference Committee Report 1: adopted by the Senate

Yes: 45 • No: 2

Senate vote • 3/25/2025

Third reading: passed

Yes: 44 • No: 3

House vote • 2/17/2025