For years, North Carolina has debated how to make healthcare more affordable, more accessible, and more accountable. Meanwhile, our neighbor to the west has quietly enacted two healthcare reforms that deserve serious attention.
Tennessee lawmakers recently embraced two principles that many North Carolina employers, employees, patients, and community pharmacies have advocated for years:
- Patients should be free to shop for healthcare services without being penalized by their insurance company.
- Pharmacy Benefit Managers (PBMs) — especially those that are vertically integrated with companies like BCBSNC, United Healthcare, Cigna, & Aetna — should not be allowed to own the pharmacies they steer patients toward.
While neither policy solves every healthcare problem, both are designed to restore competition, increase transparency, and reduce conflicts of interest within the healthcare system.
I’m not saying North Carolina should be a copycat. Every state has unique healthcare challenges and priorities. The question is whether Tennessee’s experience offers lessons that could help North Carolina improve affordability, strengthen local healthcare access, and give consumers greater control over their healthcare decisions.
Lesson No. 1: Tennessee’s Right to Shop Act (SB 510 / HB 419)
Healthcare is one of the few markets where consumers are often discouraged from shopping. Poor transparency in healthcare pricing ties the hands of patients who want to take control of the cost of the healthcare they consume.
In 2019, Tennessee enacted the Right to Shop Act (SB 510 / HB 419), a law designed to encourage consumers to compare prices and seek high-value care. The law allows patients to receive credit toward their deductible and out-of-pocket maximum when they obtain services outside their insurer’s network at a lower cost than their insurance carrier negotiated.
The concept is simple:
If a patient can purchase an MRI, surgery, laboratory test, or other healthcare service for less money outside the insurance company’s network, why should they be punished for making the lower-cost choice?
Traditional insurance networks often limit consumer options while protecting negotiated provider arrangements. Tennessee’s approach rewards patients for seeking value.
For employers sponsoring health plans, this is particularly important.
Employers bear most of the financial burden of rising healthcare costs. Every time an employee chooses a lower-cost, high-quality provider, the health plan saves money. Those savings can be redirected toward wages, benefits, and future premium stability.
North Carolina has made progress with healthcare price transparency, but transparency alone does little if employees are still financially penalized for choosing the best value.
Lesson No. 2: Tennessee’s FAIR Rx Act (SB 2040 / HB 1959)
Tennessee addresses one of the most controversial issues in healthcare: Pharmacy Benefit Managers.
PBMs were originally created to administer prescription drug benefits. Over time, many became vertically integrated healthcare giants that now control pharmacy networks, drug formularies, reimbursement rates, specialty pharmacies, and mail-order pharmacies.
In 2026, Tennessee enacted the Freedom, Access and Integrity in Registered Pharmacy (FAIR Rx) Act (SB 2040 / HB 1959), prohibiting PBMs from owning or controlling pharmacies. The law requires organizations to choose whether they want to operate as a PBM or as a pharmacy, but not both.
Supporters argue that the legislation addresses a fundamental conflict of interest.
When a PBM owns pharmacies, it can influence where patients fill prescriptions while simultaneously controlling reimbursement rates paid to competing pharmacies. Critics argue this creates an uneven playing field that disadvantages independent and community pharmacies.
Whether one agrees with every aspect of Tennessee’s approach, the underlying question is difficult to ignore:
Should the same company be allowed to act as referee and player in the same marketplace?
North Carolina has witnessed the closure of numerous independent pharmacies, particularly in rural communities. As local pharmacies disappear, patients often lose one of their most accessible healthcare resources.
Community pharmacists are frequently the most accessible healthcare professionals in rural America. They know their patients by name, help manage chronic conditions, identify medication issues, and often serve as a critical healthcare touchpoint in underserved communities.
Preserving competition within pharmacy markets is not simply an economic issue — it is also an access-to-care issue.
Why Employers Should Care
Most Americans receive health coverage through an employer-sponsored health plan. As healthcare costs continue to rise, employers are increasingly being asked to contribute more while receiving less value in return.
Employers also have a fiduciary responsibility to prudently manage health plan assets and act in the best interests of plan participants.
The principles behind Tennessee’s reforms align with that responsibility.
The Right to Shop Act encourages employees to seek lower-cost, high-quality care, helping employers stretch healthcare dollars further.
The FAIR Rx Act addresses potential conflicts of interest that may increase prescription drug costs while reducing competition in the pharmacy marketplace.
In both cases, Tennessee’s reforms are designed to reintroduce market forces into healthcare — allowing consumers and purchasers to make informed decisions rather than simply accepting the options offered by large healthcare intermediaries.
For employers struggling with annual premium increases, these are not political issues. They are practical business issues.
What Would This Mean for Rural North Carolina?
When a local pharmacy closes, residents may be forced to drive farther for prescriptions, vaccinations, and medication counseling. For seniors, individuals with chronic conditions, and families without reliable transportation, that inconvenience can quickly become a barrier to care.
Many rural communities have already experienced the loss of independent pharmacies and primary care providers. As healthcare becomes increasingly concentrated among a handful of large organizations, patients often find themselves with fewer choices and less local access.
Under traditional insurance arrangements, patients can be financially penalized for choosing alternatives — even when they cost less than the in-network option. Similarly, providers would have more autonomy, greater transparency, and more predictable revenue if they could engage in a direct-pay transaction rather than filing claims and waiting months for reimbursement.
For rural communities, more competition and more consumer choice can translate into lower costs, better access, and stronger local healthcare infrastructure. Some call it a “circular economy,” where more money stays in the community and supports local relationships.
These reforms are not simply about insurance regulations or pharmacy ownership structures. They are about whether patients and communities retain meaningful choices in how and where they receive care.
The Common Theme: Choice
Consumers should have more choices, not fewer.
Patients should be able to choose the provider offering the best value.
Patients should be able to choose the pharmacy they trust.
Employers should be able to design health plans that prioritize affordability and local care options rather than protecting the entrenched healthcare interests of their vertically integrated health insurance carrier.
A Question for North Carolina
North Carolina has become a leader in healthcare innovation in many areas. We have world-class health systems, nationally recognized medical schools, and a growing focus on transparency.
But transparency without consumer freedom often fails to produce meaningful change.
The question for North Carolina policymakers is straightforward:
If a patient can find better value outside an insurance network, should they receive credit for that decision?
And if a PBM controls where prescriptions are filled, should it also be allowed to own the pharmacy receiving those prescriptions?
Tennessee has answered both questions.
Tennessee’s lawmakers did not wait for Washington to fix healthcare. They acted in the best interests of their state’s citizens.
These are not partisan questions. They are questions about choice, transparency, and affordability. North Carolinians deserve answers to these questions.
