South Carolina

Quick Facts

Key Provisions

• Legal Status and Insurance Exemption: The cornerstone of the pending legislation, House Bill 3966, is to legally define a direct primary care agreement as a non-insurance product. This critical distinction would formally exempt DPC practices from the complex and often burdensome regulations of the South Carolina Department of Insurance. By providing this 'safe harbor,' the law aims to eliminate regulatory uncertainty that currently exists for the state's DPC clinics, encourage more physicians to adopt the innovative model, and ensure that practices can focus on patient care rather than navigating insurance code compliance.
• Mandatory Consumer Protection Disclosure: To ensure patients make fully informed decisions, the proposed law mandates that every DPC agreement features a conspicuous and prominently placed disclosure. This text must explicitly state that the agreement is not a health insurance policy and does not fulfill the requirements of any federal or state individual health insurance mandate. This transparency is crucial for helping consumers understand that DPC is a model for accessing and paying for primary care services, and that it should ideally be paired with a separate health insurance plan to cover catastrophic events, specialist care, and hospitalizations.
• Flexible and Penalty-Free Termination Rights: HB 3966 prioritizes patient and provider autonomy by embedding flexible termination rights directly into the law. The bill would require all agreements to allow either party—the patient or the provider—to terminate the contract in writing without incurring a penalty or a specific termination fee. While the agreement can stipulate a notice period before termination becomes effective, that period cannot exceed 60 days. This provision ensures that patients are not locked into a service they are unsatisfied with and gives providers a clear, fair, and legally sound process for ending a patient relationship if necessary.
• Transparent and Comprehensive Agreement Terms: The legislation seeks to prevent ambiguity and protect consumers by requiring DPC agreements to be highly transparent about services and fees. Each contract must clearly delineate the specific scope of healthcare services included in the periodic membership fee, the exact cost of that fee, and a list of any potential additional charges for services not covered by the membership. Furthermore, the bill prohibits providers from seeking any additional compensation for services that are already defined as being part of the periodic fee, protecting patients from surprise bills and ensuring a predictable, easy-to-understand cost structure for their primary care.
• Enabling Third-Party Payments for Increased Access: Recognizing that patients are not always the direct payor, the proposed bill explicitly permits third parties, such as employers, non-profits, or family members, to pay the periodic DPC membership fees on a patient's behalf. This forward-thinking clause is vital for the growth of DPC as an employee benefit, allowing businesses of all sizes to offer affordable, high-quality primary care to their workforce. It broadens the accessibility of the model beyond just individual subscribers, positioning DPC as a viable and attractive healthcare solution for organizations and families across South Carolina.
• HSA Eligibility for DPC Fees (Effective 2026): In a separate but highly significant development, South Carolina has already passed legislation that classifies direct primary care as a qualified medical expense. Beginning in 2026, this will allow state residents to use pre-tax funds from their Health Savings Accounts (HSAs) to pay for DPC membership fees. This move provides a major financial incentive for patients and aligns South Carolina with federal guidelines, making the DPC model more affordable and financially integrated into patients' healthcare spending, regardless of whether the broader DPC-defining bill, HB 3966, is ultimately enacted into law.