Vermont Legislature SmartTranscripts:

[Emilie Kornheiser, Chair]: Morning. It is Wednesday, February 11. We are here in the Ways and Means Committee. It is 9AM. We have a very full day ahead of us with really just something for everyone. So we are starting the day hearing from the Vermont Coalition for Disability Rights and then, taking testimony on H-five 77. We probably should have warned a vote for that as well, Sourcel. Maybe we could do that after the fact and If we're ready. If we're ready. Yes. Absolutely. If we're ready. And then at 10:30, we're going back to text classification language with a few edits from last time we were there, really trying to finish, get pretty clear on that legislation by next week. And then we have our joint hearing. So right after lunch, I'll remind you again, please go to Room 11, not back here. And then we are going to work on another piece of language for our miscellaneous tax cuts related to federal tax changes. So that's the lineup. Any thoughts, questions, announcements? Glad you're feeling slightly better, Teddy. And I'm sorry you're still sick, Carol. With that sorry, it's just a germ room. Welcome. Thanks for joining us so much today.

[Bridget Burkhardt, Clerk]: Glad you're here. Floor is yours, sir.

[Ed Paquin, Vermont Coalition for Disability Rights]: Thanks very much. I am Ed Paiglin, and I am speaking today for the Coalition for Disability Rights. Our theme for today is to write disability rights into every bill. And then it maybe sounds like a strange idea or an aspirational. It is aspirational. But where I hope to go with this, and I did submit some testimony, I probably won't follow it real closely. As some of you know, I've been a member of the House before myself, Represented Fairfax. And not what it says in the program. It says Barry. I live now in Barry. But never represented Barry. And I was the director at Disability Rights Vermont for some years, and worked on all kinds of issues in doing that. When we say right into every bill, almost everything that's done in this House is going to affect people with disabilities. And what I would point out is that in many ways, many things that we don't really think of as being disability issues will affect people with disabilities disproportionately. And so What I've done In the document that sent in, if you go past the three pages, there is something that I put together back in 2009. So the numbers are old. But I think what you would find is that the proportions and the picture that it gives of the profile of people with disability in the state is not something that changes real, real dramatically. There are, I'm sure, prevalence of some disabilities that are a little higher than what you might find in here. Some things might be less. There's gonna be some differences. But I wanna point out, okay, if you look at this, to worry about eight point eight percent or 8.9, this is 8.9. That's not what I'm trying to do here. I'm trying to give you a general picture of your constituents. In its most general, roughly twenty to twenty five percent of your constituents have some disability as would be defined by the Americans with Disabilities Act. And their definitions tend to be functional, relating to some underlying physical or mental condition that affects an ability to function in one of any number of different areas, or having been perceived as such. So it's fairly broad. And you'll see in that where I quote the definition. But there are a few things that I'd like to highlight. And if you look at this, thirty seven percent back in two thousand and nine of people 65 have disabilities. And so one thing that I'd like to kind of correct is the perception of disabilities as Some people think of it as, okay, the guy there's got the tag in his car and runs around in a wheelchair, or the person who's got a walker, or the person with a developmental disability that has never been, and now I'm sneaking into where I really wanna get to, a property owner, shall we say. A lot of the people that you represent are people who own their own homes, are renters, people with a long career, long work history, but age, circumstance, other sorts of situations have brought them into the same community as this guy who got injured back when I was 35 years old. And I'm way more than

[Emilie Kornheiser, Chair]: that now.

[Ed Paquin, Vermont Coalition for Disability Rights]: About two years ago, I did a little research to see, okay, oh yes, I've lived more than half my life with my disability. So where I'm going is the tax decisions that you will be making regarding education funding are going to have a disproportionate effect on people with disabilities. Now, the reason I say that is that disproportionately people, and you'll see some of the statistics in here, disproportionately people with disabilities have either circumstance have been rendered unable to work in the professions that they were working, or over time never really were able to hold time down high earning jobs. It's my feeling that almost anybody with a disability or without can find some kind of meaningful work. Or should I rephrase that and say, can be qualified for some kind of meaningful work. It's very different finding meaningful work if you have a serious disability. And so a lot of folks, even though they may be able to do certain things, they're not always the opportunity very often not there. So if you look at the proportion of our Vermont society who are unable to support themselves at a higher level. May or may not be property owners, but a good more than we think of are property owners, because many of them have come by their disability later in life. And so I really put that out as important to keep not in the back of your mind, but in the front of you. The big proposals that have been put on the table, and I have to be a little careful, because I have very strong opinions about that. And I'm going to let some of those strong opinions sneak out. One is that I used to be in these halls when the state delivered its aid to communities by a foundation formula. And I can tell you what it was like. It was a very interesting dynamic on the day that the charts came out for how the aid was to be distributed. In the Senate, they might have had an easier time because they've got all these communities. They've got a huge mix of communities. But in the House, you get your spreadsheet, you look it over and, I do pretty well this year. I guess I can vote for this plan. Or, Oh my God, I'm getting hammered this year. And I'm not likely to vote for this. And so then you end up having an unfortunate conversation with the speaker. And things get ugly fast as they try to put together enough votes. And I can tell you the overall dynamic in this kind of funding is you set the number as low as absolutely possible that you can get the threshold number of votes to get it passed. If you guys are on ways and means, you know the old saying, if you want to understand the dynamics of a situation, follow the money. Well, that was the dynamics of the situation when we worked under a funding formula. And what that means is that we had a system of education funding set up based on local control, based on the vote in that community as to what they wanted spent on their school. And then the injection of funding, the level of funding, which ultimately they would have to either accept or make up, depending upon what kind of budget they voted, that was determined outside of their jurisdiction.

[Emilie Kornheiser, Chair]: I will offer to you that what we passed last year is significantly different than the previous Understood. Six to

[Ed Paquin, Vermont Coalition for Disability Rights]: I understand it.

[Emilie Kornheiser, Chair]: I'm curious sort of where you see this nexus between folks, especially our aging population, folks with

[Ed Paquin, Vermont Coalition for Disability Rights]: Where I'm going with this, I am going in very specific direction.

[Emilie Kornheiser, Chair]: Can't wait.

[Ed Paquin, Vermont Coalition for Disability Rights]: And that is And see, I had to let my own opinion sneak in there. So that you know who you're talking to. What I see in the long term, you're gonna have to understand these structures better than I do, Granted. What I see in the short term is it appears as though leadership in both parties have talked about an injection of funds to get through the near term where there was, I think, a 12% prediction of increased rates. So if there is to be an interjection in the near term, I wanna put this in the context of who are your constituents with disabilities and what is the social context in which we're using short term funds to assist. And in there, I've included some charts from the public assets institute, which I'm on their board just, you know, for just to let you know that I I knew where to find some of this stuff. And it's I wouldn't they have definitely a thrust, but they are also, I think, pretty meticulous to use reputable sources for their for their materials. Interestingly, the rates if if we look at the chart about recent history or not quite recent, but up to about 2024, education funding compared to others has been relatively flat as measured if you account for inflation. And this chart comes from joint fiscal. So they didn't do that. The other one measures it as a percentage of personal state and local taxes. And there, you'll also find that it's been relatively flat until fairly recently, these last few extremely difficult years. This one this chart is old. It only goes to 2016. But I think it's I think it's good to show that what's happened in the recent past is that education funding has gone up with certain other kinds of inflation, but measured against our gross domestic product. Its percentage of what we as a society spend our money on has not gone up as much as one would think looking at just the basic overall number. Now this one is one of the more compelling charts, and this you'll have to think about for your long time decisions. Because if the cure and he's gonna let his personal opinion sneak in again. If the cure for our situation is just consolidating schools, how does it fix that? Which is the blue is the rate at which our health insurance goes up, our overall health care spending goes up, and the red line is our total education expenditures. So we've been squeezing that out of our system, and that's a really difficult dynamic. And I would say that's not the only dynamic. Again, from the disability perspective, there are, I would say, a lot more challenging mental health issues in this generation coming up than we have seen in a long time. It's not coming as fast as some might think. As I was the director of disability rights for months, over the course of, I would say, the last twenty years, and people couldn't always explain it to me. One explanation is the prevalence of drug abuse in the culture. But our families are under stress in ways that the generation I grew up, yeah, we were under all kinds of stresses, but they were different. And the net effect puts either we ignore them, we deal with them in schools, or we deal with them somewhere else. And there's a question as which wallet does it come out? Well, I can tell you the taxes, they all come out of the same wallet for me. And so if a service can be best delivered in school, that's where I want it to be delivered. So those are I'm referring to pressures that we have on education that really need to be thought of, I think, before you reinvent a system. Jim. Yeah.

[Emilie Kornheiser, Chair]: Represent Masland.

[Ed Paquin, Vermont Coalition for Disability Rights]: Yes. Interruption. I don't care

[Jennifer Carbee, Office of Legislative Counsel]: if she

[James Masland, Member]: wants With to regards to stress, very good point, Ed. I've talked to as many of us in recent weeks about from educators and why our students are under stress and showing signs of stress. And one of the things that comes up repeatedly is excess stimulation from God knows where. Does that affect your population, your population, the same way? Or would you like to add to that?

[Ed Paquin, Vermont Coalition for Disability Rights]: I honestly don't know the answer there. I don't have an objective way to say it's any different for ours, except to say that I suppose the less time that a person can be physically active, the more time they're gonna be in front of a screen, perhaps. But that's just an overgeneralization.

[James Masland, Member]: That's helpful. I'm just looking for your commentary if we know each other. Okay. On

[Ed Paquin, Vermont Coalition for Disability Rights]: that, I do think that there are pressures that are Exacerbated, maybe? Yeah, maybe that are exacerbated, sure. And people have talked about the effect of social media on mental health. There's all kinds of those things. I don't know. I can't differentiate the population there, what would be different with people with disabilities than otherwise. But what I want to get to

[Emilie Kornheiser, Chair]: Yeah, because I'm very happy for you to take sort of former member privilege and bring your personal perspective into this.

[Ed Paquin, Vermont Coalition for Disability Rights]: I'll take it off.

[Emilie Kornheiser, Chair]: But public and public assets knows that they are more than welcome to testify absolutely anytime they want to. Okay. So I just want to make sure we don't miss sort of your core point about how the work we're doing is impacting the lives of folks with disabilities.

[Ed Paquin, Vermont Coalition for Disability Rights]: The message, the most important thing that I would like to leave with you is that your constituents' disability profile is probably bigger than what you thought about. And there, I think you get a picture of that in what I wrote in there. But the other side of this, and the likelihood that they are a lower income, is pretty well established. The other part of the social context is that we are in an environment where you are going to be looking at emergency funding for our property tax situation. And the context that I think is most important and the charts that are probably most important in here are at the end. And that is right now, the people in state who are well situated are getting very substantial reductions in their tax burden. And the people in, say, from the fourth and fifth quintile of earners, they are going to see substantially less. And when we talk about affordability, I think it's crucial to think about affordability for whom? And so if you are injecting money into lower property tax rates, I urge you to look at ways this year that you can see that money help the people who are looking at the decision between being able to stay where they're staying or have to leave the state. Or losing their home in the state. So that's, I think, really crucial. And I think there are I'm not a tax expert, as I've learned from listening to me for the past twenty minutes. But I do think it is possible to look at the tax structure that we've got right now and say, okay. If we have x dollars that we can reduce the tax burden, let's make sure that it goes to the people who need it the most. And I would say disproportionately, that's your low income or middle income property owner with disabilities. The other thing that I would the other

[Emilie Kornheiser, Chair]: Representative Ode has a question for you, I believe. You can't see her because she's on a screen behind you. Yeah. I was just going to ask

[Carol Ode, Member]: how how you are proposing to target that help to those with disabilities.

[Carolyn Branagan, Member]: I think formula.

[Ed Paquin, Vermont Coalition for Disability Rights]: Yeah. I think there's probably several ways. Again, public assets has some proposals that have to do with changing some of the thresholds that have existed for many years with the structure that got put into place in Act 60. And so I think raising some of those structures towards the bottom, and I think changing some of the quote clips that have to do with income brackets and stuff would be valuable. I would like to leave you with one other little point, and that was, I don't wanna ignore, and there's a reference to it in here. And I gave you the link, which you already know about. And this is old news because you worked on it last year. And that was, there was proposed a small bit of help for people who are caregivers, unpaid caregivers. And I know that came over from the Senate. When I looked it up, it was less substantial than I thought it would be to have a huge effect. But I would think of it as a small step. And having a look at that, if there's any possibility of that going through, you would definitely be helping, again, that party, your constituent, that need assistance with activities of daily living or instrumental activities of daily living.

[Emilie Kornheiser, Chair]: And I know that that bill was reintroduced with some new guidelines, I think, to make it a little bit better. And I'm hoping the Senate's able to send it back over to next year. Yeah, Representative Branagan.

[Carolyn Branagan, Member]: And one thing I wanted to point out to you since I have learned during my time up ways in means that those first, second and third quintiles you mentioned, even though they're, so this is some of them, not the vast majority, but some of that group are better off than you think they are because it's their assets which we don't measure. Not their income, what we look at is their income, what they earn, money that they pay tax on. But there is other source of money they can live on and assets that they already own that we don't tax or can't tax that makes it tricky. Sometimes, especially in people whose age is older, they have goods and things that they can live on that younger people don't. So someone making $15,000 more than that, let's pick 30,000, that might be a social security income. They might have that, but then that's all. So on their tax return it looks like they don't make a lot of money but they have a beautiful house and land which likely in current use and other things that they So that's something that I've struggled with. I think other members around the table have How struggled with to find what it is we want to target as far as making this fair.

[Ed Paquin, Vermont Coalition for Disability Rights]: Understood. Understood. Being a person who has

[Carolyn Branagan, Member]: We want waste and means. What committee Work.

[Ed Paquin, Vermont Coalition for Disability Rights]: Oh, I've been on a number of committees. Agriculture, health and welfare, back when it was health and welfare, and then Natural resources. Natural resources for one term, but appropriations for two terms.

[Nolan Langfeldt, Joint Fiscal Office]: So So

[Carolyn Branagan, Member]: you know about the flows.

[Ed Paquin, Vermont Coalition for Disability Rights]: Where the money goes. At least where it used to go back in the stone age when I was in your book.

[Emilie Kornheiser, Chair]: Thank you so much for joining us today. Really appreciate it. You're welcome.

[Ed Paquin, Vermont Coalition for Disability Rights]: And I appreciate the opportunity. Thank you very much.

[Mike Pieciak, Vermont State Treasurer]: Thank you.

[Ed Paquin, Vermont Coalition for Disability Rights]: Just for your question, Carol. There's a lot of ways of measuring wealth. And you've got to have something to pay the wealth with. So, if there are other ways of looking at school funding, by all means, look at other ways of accessing wealth. But don't make it so hard on people to live and to pay what they need to pay to live. And that's for people, low and middle income people, I can tell you, do not save as much as they really should be saving. And it's really tough to see people getting into retirement and finding that they still owe someone their house, and they're gonna be living mostly on social security.

[Carolyn Branagan, Member]: Thank you. I understand. Thank you. We'll do our best.

[Mike Pieciak, Vermont State Treasurer]: There we go.

[Emilie Kornheiser, Chair]: We're gonna

[Ed Paquin, Vermont Coalition for Disability Rights]: Thanks very much.

[Emilie Kornheiser, Chair]: So much for joining us.

[James Masland, Member]: Appreciate it. Yeah.

[Emilie Kornheiser, Chair]: We're gonna switch gears, folks, and we are going to hear about H577 because of various people's schedules. We're gonna start with Nolan because his time is the tightest today. I understand that's gonna be slightly confusing, so I think we're gonna go oh, or maybe we can start with Jen instead of Nolan, do you is that okay?

[Nolan Langfeldt, Joint Fiscal Office]: I exactly intend to attend.

[Emilie Kornheiser, Chair]: Okay, great. Jen. Okay. I think we're gonna do Jen Nolan treasurer. Okay. Wait, no. Treasurer has to leave at ten Treasurer has to leave, okay, at ten as well. Ten and a thirteen.

[Jennifer Carbee, Office of Legislative Counsel]: Right? And a few third.

[Emilie Kornheiser, Chair]: Yes, please. Okay. We're gonna stick to the original lineup here. You have to

[Nolan Langfeldt, Joint Fiscal Office]: leave at ten?

[Emilie Kornheiser, Chair]: Jen has to leave at I know you told me this already.

[Bridget Burkhardt, Clerk]: No more. So sorry. Okay.

[Emilie Kornheiser, Chair]: Great. Okay. We're gonna go treasurer Nolan Jen. That's gonna be our lineup here. Okay. Hello, welcome. Good morning. So glad that you're here. You may jump right into that seat. Thank you. That's everyone. So folks, we're gonna hear about H577. This isn't a bill that just came over from House Health Care, an act relating to establishing the Vermont Prescription Drug Discount Card program. And I'm glad you're here.

[Mike Pieciak, Vermont State Treasurer]: Thank you very much, Chair Kornheiser, and thanks very much to the Ways and Means Committee for having us this morning and giving us some time. We're excited to talk about this bill that passed Health Care 11 to zero last week. I wanted to talk a little bit about sort of what it does and the policy implication, and then sort of drill in on why is it in the Ways and Means Committee. And then happy to answer any questions that the committee might have. We do have a slide deck that we can show here in a minute. But generally, I think this committee is well aware that there's been increasing health care costs in Vermont. Costs are going up across the board. Right now, it's estimated that Vermonters spend a single dollar of every $5 they earn on their health care costs. So a dollar for every $5 that they earn is going toward health care, a pretty considerable sum, more than pretty much any state in the country. One of the major drivers of those increased health care costs are prescription drugs. We see that prescription drug premiums rose up to 27% for some Vermonters 2024 to 2025. That is something that's very consistent nationally. Significant increases in pharmaceutical costs. And we all know that these increased costs are really squeezing the household budgets of Vermonters and contributing to inflation and overall affordability challenges. So in 2024, Americans spent just under $100,000,000,000 out of pocket on prescription drugs, which was up 25% over the last five years. So this is a discount program that we're proposing that would be focused on reducing costs through honors, reducing healthcare costs, reducing costs at the point of sale at the pharmacy. The ArrayRx cards, which is what this is called, and I'll talk a little bit about the partnership that is involved with ArrayRx. If we got the same take up that Connecticut has received in just its first eighteen or two years of running this program, which is just 1% of their population, even at that relatively small number, and we hope to do a lot better than that, we would see Monarch saving $18,000,000 a year on their prescription drug costs. So $18,000,000 a year, that is money that stays in Vermont. It's not going out of state. It's money that's staying in Vermont to help families meet their budgets and not to pharmaceutical companies. So I think it's a win all the way around. On average in Connecticut, residents using the ArrayRx discount card program have saved about $200 per month on their prescription drug costs. You can see here just a little chart showing where those savings derive from. About 80% savings on generic drugs. So, pretty deep discount. And then a 20% savings from more name brand drugs. What hits a rarex?

[James Masland, Member]: I don't want to get into that.

[Mike Pieciak, Vermont State Treasurer]: But this was the partnership, a collaboration that was founded by Oregon and Washington a number of years ago, where I think their partnership ranks in the decades. But in terms of bringing in other states, that's been a more recent development. Now Connecticut, Arizona, and Nevada are part of this collaborative. And it offers a free discount card program to to help people save on their prescription medications no matter their age, no matter their income status, no matter their eligibility. So it's a broadly available and free discount card program to the residents of those states. They welcome other states to join. That's what we're asking the legislature to do, give us the ability to join this collaboration. The Discount Card program is one of the programs that they offer. That's the one that we're interested in administering or being the point person on in Vermont. They have other programs that states can participate in. They're probably better for other agencies within state government. But I think it's great to have a relationship with this collaboration of states because health care continues to be a major pressing issue. It's going to be important for us to know what other states are doing, try to not just partner with them, but learn from them. And the Array partnership offers that opportunity. In terms of ArrayRx, again, there's no cost to Vermonters free enrollment, no pharmacy fees. We'll get into the fee structure here in a minute. There's broad coverage. So all FDA approved prescriptions plus certain select over the counter items are covered as well. I mentioned the strong savings in terms of the percentage discounts. It's accepted at 65,000 pharmacies worldwide, nationwide. There is a transparency tool that we'll talk about here that allows people before they go to the pharmacy to look up their medication, see what would be best, the discount card or their own insurance, if they have insurance, and they can be informed before they go to the pharmacy. The thing that's also big is there's a significant focus on privacy. There are other discount card programs that exist. They're for profit. They're privately run. They often have worse reimbursement rates for pharmacists, but they also sell data that they collect from consumers. And this, because it's a not for profit, it's literally just a collaboration of states, There is no profit motive and there is no selling of data. The data stays private. Coverage gap support. So sometimes insurance doesn't cover a certain drug, we'll get into some of the categories of who has benefits from But also, there's potentially gaps in coverage when people transition from one plan to another, one job to another, and that sort of thing. So in terms of program administration, one of the things that we like about this program is that ArrayRx is run basically by the employees of a department in Oregon. They are the ones that do the heavy lifting. When you join this collaborative, your role is to really help find partnerships locally in your state, help promote the card through earned media or paid media, and be that sort of spokesperson for it. But we don't have to operationalize any of the important contractual or negotiation or administration components of this program. So it's a relatively light lift from an operation standpoint, but I think it's a pretty big impact in terms of those that are able to get the card and use it. ArrayRx, the state of Oregon, they negotiate contracts with nationwide pharmacies through their PBM. They operate a customer service email and phone line. So, they handle those kinds of questions that come in. They administer the cards and determine eligibility. They maintain IT systems and data security. So again, all of that work that really is the thing that is expensive and costly and time consuming. Oregon is the one handling that. We also, because just somewhat by fortune, but they will start to charge states a fee to join their collaborative in the future. I think we're going to be the last state that does not have to pay an initiation fee. So that will be great as well. So again, our work is to drive awareness of the discount card, develop partnerships to expand the discount card program through Vermont, drive awareness, and then also participate in a steering committee, which is a member from each of these states that talks about this program, their other programs, and just health care matters in general throughout The States. So in terms of the program fee, this is why the bill is coming to house ways and means. In age five seventy seven, there's language that allows us to collect this special fee. And this is a sort of a detailed sort of breakdown of how that process would work. But the patient, the customer goes into the pharmacy with their discount card. They present it. They are shown what the price is. Within that price, there is a fee internal to it. So there's not a fee on top of it, like a sales tax or a fee that happens after the fact, but a fee baked into the discount. So they pay that price. The pharmacy remits that fee that was baked into the price to ArrayRx that helps fund ArrayRx operations. That's how they make money and stay afloat and make sure all of those things that they're doing operationally continue to happen. And then they do suggest that it is possible, although it would be a relatively small amount of leftover fee money from a various state that would then get dispersed to those individual states after the fact, after they've paid for their operations and their needs. And that's where the fee language comes in, is allowing for ArrayRx to send us any excess fee that does not need to be used to cover their operations. So any nominal excess revenue would be returned to all of the states annually. We don't expect it to be very much, and we would anticipate using it for outreach and marketing of the program. We are asking in the bill also for a $50,000 one time appropriation to help with the startup costs of marketing the program. The state of Connecticut was the most recent to join the initiative, and they did not get any money for outreach and marketing, for sort of paid outreach, paid marketing. And they said that they wished that they had. They thought it would have helped their uptake out of the gate much more quickly. They're going back and asking for it now. So we don't anticipate needing it again. It's really just a one time ask. But if we did need money in the future, there would be a nominal amount here that would gather over time, allowing us to use it.

[Emilie Kornheiser, Chair]: It sounds like the pharmacies are essentially almost collecting the equivalent of a trust tax from the patients and then remitting it to ArrayRx. What is their contractual relationship between the pharmacy and ArrayRx that requires them to remit that money?

[Mike Pieciak, Vermont State Treasurer]: Yeah, so some pharmacies, it's all voluntary. A pharmacy doesn't have to take the ArrayRx card or any other card. But there are 65,000 pharmacies that have entered into a partnership with ArrayRx, so it's defined in that contractual agreement.

[Emilie Kornheiser, Chair]: Thank you. Are these the pharmacies that you see?

[Mike Pieciak, Vermont State Treasurer]: Yeah. The Connecticut, we don't have the number for Vermont, but Connecticut, and I think it would be similar because we just have a similar mix. I think it was 98% of their pharmacies in Connecticut take the ArrayRx card. So it's a mix of the big national ones, retail regional ones, and maybe some also some independent well.

[Emilie Kornheiser, Chair]: Representative Canfield and the broker.

[Mike Pieciak, Vermont State Treasurer]: Good morning. Morning. So this special fund, you're gonna establish a new special fund? Yeah. Exactly right. Do you expect any increase in manpower? No. That's no. Because the reason that why we like this arrangement is that the work that needs to be done, the heavy lifting is really on Oregon. And then it comes down to our office. Like how successful we are getting people to sign up really comes on to our office. But we don't need if one person signs up or 100,000 people sign up, it doesn't cost us any more or less. We don't need a certain number to be sustainable. So it doesn't give us any sort of pause for concern in terms of the burden of our work or what we need to accomplish. We will work hard because we want reporters to be aware of this and to take advantage of it. But from an operational standpoint, it should have pretty limited impact. We're doing a lot of outreach and marketing as it is for other programs that we operate in our office. And this would just be adding that into the mix.

[Emilie Kornheiser, Chair]: And after representing Burkhardt, we're going to have to with our of us saw it. Mine

[Bridget Burkhardt, Clerk]: was actually really a follow-up question about the pharmacies. More and more medications are sold through specialty pharmacies that are virtual. So, some of these really expensive ones that are injectables and that kind of thing. Does this program work with that? How do they do they have contracts with those kinds of pharmacies that are not necessarily your local walk in pharmacy?

[Mike Pieciak, Vermont State Treasurer]: Yeah, they do. I was just wondering if we had a slide that shows it. Basically, if we just skip ahead, Peter, just to that Find Your Pharmacy slide, we'll go back to the presentation. You type in your location, and it will show both the physical location of pharmacies that accept the ArrayRx discount card. But there are also online retail pharmacies that are through the discount card program as well. So there is that option. So if that were your preferred way to acquire your pharmaceuticals, or is that option?

[Bridget Burkhardt, Clerk]: Some of the high cost ones go through a So for example, someone in my family is on a very specific injectable medication that goes through a specialty pharmacy that the manufacturer has contracted with to manage patients that are on that drug. So those are more specialty pharmacies. Didn't know what would be. So

[Mike Pieciak, Vermont State Treasurer]: that's searching for your pharmacy. The other option here, if you go up a slide, find your prescription, you can put your prescription in and it will show whether or not it's covered and what ways you can acquire it if there is a retail pharmacy option or there's a physical. It might not be in all cases, but they do cover all FDA approved medications. You would think that it would be in the

[Emilie Kornheiser, Chair]: You had a question to represent Masland? I really want to ask the treasurer to finish the presentation. The

[James Masland, Member]: pharmacies are offering a discount. Do we worry about whether the pharmacies are made whole? Is there a loop around? Or do they just suck it up?

[Mike Pieciak, Vermont State Treasurer]: Yeah, mean, we're happy to have the rarex provide information that they provided on the house healthcare. But the way that it has worked in Oregon and Washington based on their description to us is that the reimbursement rate for the ArrayRx card is different and more advantageous to pharmacies than other discount card programs that exist.

[James Masland, Member]: They may hold in some manner.

[Mike Pieciak, Vermont State Treasurer]: Yeah. I mean, the benefit of getting the discount is that there's bulk purchasing and volume discount. So that's sort of the trade off. Now-

[James Masland, Member]: That's good. That makes sense. Thank you.

[Mike Pieciak, Vermont State Treasurer]: But the thing that is important that ArrayRx sort of emphasizes is that it's to nobody's advantage. If pharmacies are being driven out of business by their ArrayRx discount card because it's a no profit motive and it's a public service. So they want to be able to work with pharmacies to find the right balance. Okay, makes sense. Thank you.

[Emilie Kornheiser, Chair]: Yes, and then we're going go back to the presentation. You were truly last.

[Nolan Langfeldt, Joint Fiscal Office]: Okay. I believe you mentioned an initiation fee that you thought the state would be exempted from. Is that for certain? And how much would that initiation be plus Vermont

[James Masland, Member]: if we're not? Yeah.

[Mike Pieciak, Vermont State Treasurer]: So it is for certain. And the reason I know it's for certain is because they haven't told us a number. So we haven't included it in the legislation in any way. So, they are planning to do that for states that are coming and establishing a relationship with them into the future. Even though we haven't entered into an agreement with them and we don't have the legislation, they consider us in conversation with them and in relationship with them in terms of pursuing it. So we will be exempt from the initiation fee.

[Ed Paquin, Vermont Coalition for Disability Rights]: You're not

[Nolan Langfeldt, Joint Fiscal Office]: exempt, what will that

[Mike Pieciak, Vermont State Treasurer]: be? I can give just an example of the Vermont Saves program. When we entered into the Vermont Saves collaborative with Colorado, we had to pay $100,000 initiation fee. And that's something we did pay. Earlier states didn't have to pay it in Vermont Saves. It's in that ballpark, I would guess. But again, we'll be exempt from it. Well, we won't have to

[Jennifer Carbee, Office of Legislative Counsel]: worry it. Yeah.

[Mike Pieciak, Vermont State Treasurer]: If we're not. They'll come out of my paycheck. So I'll have a very tough year next year.

[James Masland, Member]: Let's go back

[Emilie Kornheiser, Chair]: to where you were and then skip what you've covered already.

[Mike Pieciak, Vermont State Treasurer]: Great. Were just talking about how the card works. You visit arrayrx.com. You can see the public facing.

[Nolan Langfeldt, Joint Fiscal Office]: It will

[Mike Pieciak, Vermont State Treasurer]: be on your phone or on your email, on your computer. You sign up by entering your name, your date of birth, your Vermont address. The eligibility is quite broad. Your name, date of birth, that's pretty straightforward. The Vermont address piece, that can be where you live. It can be that you're here for the summer or for the winter. You just have an address for three months. It could be that you live in New Hampshire, you work in Vermont, you put down your employer's address. It just has to be a verifiable Vermont address. They are intentionally open and expansive about who can use it. Even they tell the example of somebody that was visiting for a few weeks from Canada that had a medical issue and needed to get pharmaceuticals. They put down their friend's address and they were able to use the card and get the drugs at a discounted rate. So eligibility is very broad. It doesn't cost us anything in any way to have more people use the program. So we are all good with that. Cards generally, for the most part, are going be delivered digitally. So they'll be on your phone, but they can be delivered by mail to those that have a challenge with that. But you can basically be in your car, sign up for it, and go in and then use it. It's a pretty fast administrative process. We talked a little bit about how the card works in terms of finding the access to your drug or to your pharmacy. But you go onto their page, you can search for your prescription drugs, you can search for your local pharmacy. The next page just shows that slide when you're searching for your particular drug, the quantity of it, the day supply of it. Similarly for the pharmacy, how it shows up when you search for it on that location tool. And then just a couple of samples, price differences between what you might get for the cash price and then what you might get from the retail price for a thirty day prescription. And you can see the significant discount just here for four drugs that we took a sample of. Then, again, to the representative's point, the ArrayRx mail order price, those are generally longer durations, that's about ninety days there. That's why the price is higher, but you're getting ninety days instead of thirty days. So pretty significant discounts. And then just a bit about who does the discount card benefit? I think when we started this process, you had to make a choice really between using the discount card or using your insurance. The discount card could have a deeper discount, but it wouldn't necessarily count toward your deductible. That was how it's set up in all of the other states. So it was clear to us that those that were uninsured would have the biggest benefit because they don't have the option of using their insurance. Either they're paying out of pocket for the full cost or they could use this discount card program. And we know that it's about three percent of our population, over 10,000 people in that situation. It skews toward places like Essex, Lamoille, and Orleans County, which is a rate of 6% uninsured, with Essex County having an 8% uninsured rate. So, the kingdom has a little bit higher uninsured rate.

[Ed Paquin, Vermont Coalition for Disability Rights]: But

[Mike Pieciak, Vermont State Treasurer]: the House Health Care Committee did incorporate language into the bill that allows it to be treated toward your deductible as well. So, it still benefits those that are uninsured. They have no option. They can only either pay out of pocket or use a discount card program. But now even those that have insurance will have that same option and decision to make. If it's a better rate on their insurance, they'll just use their insurance. But if they get a better rate with the RayRx discount card program, they can get those savings and then have what they did pay out of pocket count toward their deductible. So the universe of people that this helps is they've been expanded greatly by the work of the House healthcare committee. But if you think about the other groups that would benefit from this most clearly, those that are under insured. So a lot of Vermonters have big deductibles that they have to meet. So if you're early in your deductible year and you're relatively healthy and young, you know you're not going to meet your deductible. I'm going to use this discount card program. Again, with the language, it will also apply to your deductible, but it still could generally be a decision that you have to make. And then seniors without pharmacy coverage, I think that's another category that we should be thinking about because about 50,000 Vermonters had a Medicare Advantage plan that ended last year and they had to find some alternative coverage. Not a lot of Medicare Advantage plans were available to them. So I think a lot of people probably went back onto original Medicare. But again, whether because of price or whether they weren't aware, they also have to get a separate pharmaceutical insurance coverage through Medicare. I don't know if everybody did. I'm sure we don't even know the true extent of what the coverage situation is. But nationally, about eight to ten percent of seniors don't have prescription drug coverage that are on Medicare. And then the other piece of it is any drugs that aren't covered by your insurance. So, for example, there are weight loss drugs that are covered if it's for certain treatment of diabetes or other ailments. But more and more and more, insurance is not covering them for weight loss. Beats would provide a deep discount for those drugs. Specifically in Connecticut, I believe it's a 40% discount on those GLP-one drugs. So we have just a couple of examples here of somebody that might be using the card and the benefit that they might expect. So somebody that's relatively young with a high deductible Bronze plan, they need a couple of medications. They have pretty significant discount on both of them, on the Adderall, relatively pretty significant price. The savings for them, dollars 153 a month. So just an average person needing drugs that might be consistent with their age, you can see sort of the impact that it has for them. Similarly, somebody that's a little bit older, 72, they have Medicare but no pharmacy coverage, and see some of the drugs that they may need and the discounted price that they could get with the RayRx for a pretty significant $90 a month saving. And then mentioning the GLP-one drug, here's somebody that, let's say, meets that drug retail price of about $1,000 In this case, the discount's much more significant than 40 percent. They're getting it at a $265 per month cost of savings of over $800 for that individual. So just in closing, we see this as an opportunity to help with the affordability issues that we're facing in health care, do it at a no cost option to the state and very limited requirement in terms of administrative work from our office. So we see it as a win certainly across the board. If you have any questions, obviously you can always reach out to me. But I also just wanted to mention Peter Trombe, who's here, our director of legislative affairs, and our deputy treasurer, David Cher, who's also available as well.

[Emilie Kornheiser, Chair]: Thank you. Representative Ode has a I

[Carol Ode, Member]: do. Thank you.

[Emilie Kornheiser, Chair]: It was

[Carol Ode, Member]: a great presentation. Thank you so much for doing the work for this,

[Emilie Kornheiser, Chair]: to bring it to Vermont. So I my question is about privacy of data. I'm thinking about people who might be concerned about giving their name and their address. So does

[Carol Ode, Member]: the federal government could they have access to this data, and how will the state handle the privacy?

[Mike Pieciak, Vermont State Treasurer]: Yeah, well, it's a great question. Mean, right out of the gate, one way that this is improved from other options is that this data is not sold or provided to anyone outside of the state or outside the state collaborative. So the privacy is enhanced just from that. In terms of who will hold the data, we have access to it from an anonymized standpoint. So Oregon will hold the data. They're the ones that administer the program. Oregon, like Vermont, is a state that's not gonna give in to the federal government's demands without a fight. So I don't have a lot of concerns about that. But we do have access in Vermont for reasons that are legitimate in terms of we wanna see which drugs are being utilized. Is there a certain population that's using more or less of the drugs? Does that tell us something about underlying health conditions? So we will have access to it on an anonymized basis, but Oregon's the one that will maintain it. And like I said, have confidence that they certainly have all of the IT and data privacy pieces that they need to have. They're not gonna sell it to anybody. And if there's a demand for it, that, you know, they will use all legal options to protect it.

[Emilie Kornheiser, Chair]: You said it was a non profit with a board of directors?

[Mike Pieciak, Vermont State Treasurer]: So it's actually just a collaboration of states. It's a steering committee. So yeah.

[Emilie Kornheiser, Chair]: Thank you.

[Nolan Langfeldt, Joint Fiscal Office]: Questions. Thanks.

[Charles Kimbell, Ranking Member]: So it seems too good to be true. We're here at discounts, and it's not costing really that much money to the state, easy to administer. So I'm always weary about something that looks too good. Wary, not weary. Wary. One of the questions is, why the state treasurer's office? I know you bring that to us, but in Oregon, it's not managed by the treasurer's office. Do you think this is something that your office would be doing long term or passing it off to a different agency? Yeah. So the reason

[Mike Pieciak, Vermont State Treasurer]: that I sort of became aware of this program was the comptroller in Connecticut, Sean Scanlon. He administers this program in Connecticut and he told me about it probably about two and a half years ago. He said, Hey, we just passed this in Connecticut. We're doing it in our office. We think it's a great program. We think you should look into it. So we did and we thought about it for a few years. Then sort of with all of the changes that are happening in healthcare, like the cutback on Medicaid, the subsidies going away on the ACA, just seemed like the population that this was going to help just healthcare costs overall were going to go up. So it seemed like the right time to bring something like this forward. So we plan to continue to run this program out of our office. It really is consistent with other programs we do that try to drive savings or affordability, like our Vermont Saves program or the medical debt relief program that we passed last session. So I see it sort of inconsistent with that. And then if we pass this, it will be the comptroller in Connecticut, our office here in Vermont. But there's now an interest in state treasurers broadly of bringing this proposal forward in their various states. So I think we'll see more treasurer's offices bringing it forward in the next couple of years.

[Charles Kimbell, Ranking Member]: Is there something the state can withdraw from at at any point in time? Is there any contract that are signed and liability?

[Mike Pieciak, Vermont State Treasurer]: We'll enter into a contract with Ararex to be in their collaborative, and then we'll be participating in the discount card program. So we'll obviously want to take a close look at our legal team and sort of the contracting process that happens whenever we enter a new contract, we'll kick in. But no doubt there'd be a provision for us to withdraw if we so desired.

[Emilie Kornheiser, Chair]: I'm Buzzzazak and then Branagan. On the slide about program administration, it says our ARR actually administer cards and eligibility. What is eligibility? Is that eligibility of certain drugs

[James Masland, Member]: or pharmacies?

[Mike Pieciak, Vermont State Treasurer]: Well, will do that too. They'll do the negotiation and the discounts and the pricing and all of that sort of thing. But what I meant by that was eligibility of who can have the card. So I mentioned it's really simple. It's just your name, your date of birth, and then a legitimate Vermont address, whether that's your business address or your vacation home or your primary home or your apartment, whatever it might be. Those are basically the three criteria. So it's pretty straightforward, but they'll be the ones that determine that and then to enroll the person in the card and then to send them the card as well. So, any Vermonter can

[Nolan Langfeldt, Joint Fiscal Office]: take advantage of it. They're just gonna verify that.

[Mike Pieciak, Vermont State Treasurer]: Yeah, exactly. Any Vermonter. Yeah. And it can be brought to people that are not a Vermont resident, but spend time in Vermont.

[Nolan Langfeldt, Joint Fiscal Office]: That would be covered too.

[Emilie Kornheiser, Chair]: Representative Branagan? We're running out

[Carolyn Branagan, Member]: of time, but the examples you gave us are the kidney pharmacy and Walgreens. I, in my district, had one of, I think there are about 20 independent pharmacies left in the state. I have one of them in my district. Do they benefit too? Do they get hurt?

[Mike Pieciak, Vermont State Treasurer]: Yeah. So I think the point that we always make is that the program is voluntary. So if an independent pharmacist does not want to participate in the RayRx, they cannot participate in the program. What we hear from Oregon is that the ones that do participate in Oregon are Connecticut or Washington, but they have better coverage, pricing than some of the other discount card programs that exist out there. So they haven't been able to provide all of the details, but some of that is proprietary to them in terms of what their actual contracted prices are and what the discount rate is and what the retail price is and what the fee is and all that sort of thing. But that's what they represent to us, that it's a better program than those cards that exist out there. But then they also emphasize that it is a voluntary program that's not being forced on a particular pharmacy if it turns out that they don't believe that it's a better option for them or a better rate for them or a better program for them to participate in.

[Carolyn Branagan, Member]: I'm weary of it too. Not weary. Like Charlie. But it sounds too good to be true.

[Nolan Langfeldt, Joint Fiscal Office]: Yeah, well,

[Mike Pieciak, Vermont State Treasurer]: we definitely thought about this for a long time before hearing about it from Connecticut and did our own due diligence on it and our own consideration about what the benefit and what the impact, what the cost might be. I agree with you. I see it as a win across the board. We are asking for small one time appropriation. We will have to do more outreach and marketing in our office, but those are things I think we can absorb. So any of those sort of costs, whether they're sort of administrative costs or actual costs, we think are relatively minor for the impact that it would have for Vermonters. And I do think it's better to have it be a state run administered program rather than a for profit discount card that exists out there. We just have different motives when we're operating a company like this than when the private sector does. So I think it's a

[Ed Paquin, Vermont Coalition for Disability Rights]: win from that perspective, too.

[Emilie Kornheiser, Chair]: Thank you. You too. Thank you. Superbundo. Represent, I would pause a sec.

[Rebecca Holcombe, Member]: No, Holcombe. Thank you so much for all your work. It sounds like this collaborative shared services approach has been down from increasing competition with the bring down. Are any of the members of the collaborative using this for all residents and not just for people who see themselves as underinsured or who are not insured?

[Mike Pieciak, Vermont State Treasurer]: Yeah, so in every state, including in Vermont, you join, it can be every single person that uses it. And in Connecticut, they are passing language or proposing legislation that would do the same thing we just did in Vermont, which would allow it to count toward their deductible. So there are states moving in that direction. But broadly, it benefits every single person, whether you have insurance, whether you don't have insurance. Everyone can use it. And in Vermont, if we pass it as is with the language included, I think it really has the opportunity to literally benefit everybody because you're basically just getting the best price and there's no downside, if you will. Both to represent Branagan's question and represent Kimbell's question. Before that language was included and you said, Well, what's the downside? I would have said, it can be complicated for a consumer when they go to the counter at the pharmacy and they say, Okay, I have insurance and I have this discount card program. I have a better rate with the discount card. I have a higher rate with my insurance, but the discount card won't let me count it toward my deductible. Will I hit my deductible this year? It's early in the year. Maybe it's late in the year and you know you won't. And that was sort of the question that would have had to been asked. But with the language, the fact that now counts for your deductible, that sort of complicated or what could be potentially complicated sort of judgment call no longer has to occur. So I think even that was the thing I thought was the most complicated piece of it going into the session. And that's been resolved, which is nice.

[Emilie Kornheiser, Chair]: Thank you so much. Oh, no. Representative Ode has a question. Sorry.

[Carol Ode, Member]: Yes. But Gerard Kornheiser asked, is

[Emilie Kornheiser, Chair]: this a nonprofit? And then I heard you talking about it being state run. So I didn't quite get

[Carol Ode, Member]: the answer when you answered the chair. So can you just repeat for me that?

[Mike Pieciak, Vermont State Treasurer]: Yeah. For sure. So it it doesn't have its own, you know, legal status. It is a collaboration of states. I mentioned those states are Washington, Oregon. They're the primary two that started this. The actual employees that do the work for the collaborative are from the state of Oregon. And then Nevada and Arizona have joined, and then the state of Connecticut has joined. I understand that New Hampshire is looking at joining as well, and also New York is looking at joining. But we are, you know, next in the queue, if you will. And then there is a steering committee, a representative from each of those states that participate in the steering committee. It's really similar to how we do our Vermont Saves program. We have a pretty similar structure. Colorado is the sort of the state that holds the contract with the vendor. We joined into the partnership with Colorado. We get the benefit of their contract. Really, like with Vermont saves or this program, we could not do this on our own. We are too small. We wouldn't get the benefit. But when we join with Colorado or we join with Washington, collectively, we just have a lot more power as states and we are able to get better pricing, better discounts and better results really for all of our residents.

[Emilie Kornheiser, Chair]: Thank you so much for joining us.

[Mike Pieciak, Vermont State Treasurer]: Yeah, thank you all. Appreciate it.

[Emilie Kornheiser, Chair]: Some folks we're going to hear from Jen Carvey and talk through the legislative language, and then Nolan's going to come back from across the hall and talk through the fiscal impact. And then we might try to hear from another witness later today or tomorrow, if possible, and then vote tomorrow.

[Jennifer Carbee, Office of Legislative Counsel]: Good morning. Jen Garvey from the Office of Legislative Council. I will put up the language as recommended by House Health Care. So it's great you've heard all about program, and I'll show you what the legislation itself calls for. So this is H577, an act relating to establishing the Vermont Prescription Drug Discount Card Program. It is a strike all amendment And it establishes a new sub chapter in 18 BSA chapter 91. That's the chapter on prescription drug cost containment. So this new sub chapter is on the Vermont prescription drug discount card program. It establishes program to be administered by the Office of the State Treasurer for the purpose of pooling prescription drug purchasing power with other US states and territories and non governmental organizations, and it will be made available to all Vermont residents. The purposes of the program allows the state treasurer to cooperate with other states and territories, regional consortia or non governmental organizations or a combination to pool prescription drug purchasing power to reduce prescription drug costs, negotiate discounts with drug manufacturers, centralize prescription drug purchasing and establish volume discount contracting. And it defines volume discount contracting as the negotiated purchase of a large quantity of prescription drugs at a decreased cost. Here's the specific, ways and means part. It says the treasurer may require that reasonable fees be charged to defray program costs, and it not withstands the provision 32 VSA six zero three that says only the legislature can establish costs to allow the treasurer to determine the amount and method of collection of any fee based on actual costs. So they don't know what those are yet. The amount paid for a prescription drug after application of the discount card by someone who's covered by a health insurance plan will be attributed toward their deductible and out of pocket responsibilities. That was the part the treasurer was talking about. And you'll see there's more language in upcoming sections that amend the insurance laws to make sure that will be accomplished. And then it requires an annual report starting 01/15/2028 to the House Healthcare and Senate Health and Welfare Committees and the governor detailing the activities of the program during the previous calendar year, including how many Vermont residents and pharmacies participated, what the savings was and the balance in the Vermont Prescription Drug Discount Card Program Fund, which gets established next. So this establishes the Vermont Prescription Drug Discount Card Program Fund as a special fund to be administered by the treasurer to support the program established in the subchapter. The fund consists of monies appropriated by the General Assembly, any monies transferred to the fund from the federal government, other state agencies, or other government source, any money from the payment of fees or other money due to the program, and anything else that anybody wants to give to the treasurer of the broker. And I was also asking for

[Emilie Kornheiser, Chair]: the treasurer when he was sitting here if we really needed a special fund for this or not. And so we will pick up that. Yes.

[Jennifer Carbee, Office of Legislative Counsel]: And you've got still got Peter from the treasurer's office to bring that back. This would have the treasurer credit to the fund all interest earned on the fund balances and any other income derived from deposit and investment of monies in the fund. And the monies remaining in the fund would, at the end of a fiscal year would stay in the fund. Sections two and three deal with the insurance part, a health insurance part of things. So I don't know how much you want me to go into these, but these are the- Pretty pictures. Yes, these are the mechanics of making sure that money is that people spend out of their own pocket if they're getting their prescription drug by using this card instead of using their insurance gets credited toward their out of pocket maximums and deductibles the way the trigger was describing. So there's lots of pages of that. Shows up in two different parts of the statutes. And it does also require the insurers and pharmacy benefit managers to make forms available on their website so that the person who used the card can submit their proof of the actual amount that they paid in order to have that amount credited. And they're also supposed to provide notice to everyone covered by their plans that they do have to provide their own proof of payment and some ways to do that. And it's my understanding some of this is happening already with other discounts and other things run outside of insurance, but attributable under our existing law to deductibles and out of pockets. Finally, Section four is a report. This requires the Treasurer's Office or the Treasurer by next January to report to the General Assembly on implementation of the program, including any recommendations for improving program administration, any fees to be charged to participants and an estimate of the projected cost to the state in the event that additional financial support is determined to be necessary to administer the program. And Section five appropriates $50,000 from the general fund to the treasurer's office for the costs of developing and implementing program as set forth in this act. The act will take effect on July 1.

[Emilie Kornheiser, Chair]: Also a question about ways we could maybe narrow that fee authority a little bit. So I think we'll sit on that.

[Jennifer Carbee, Office of Legislative Counsel]: Okay, great. Yes, I did try to get the treasurer's office to identify a fee. And at least in the fall, when they were working on this, they were not able to determine what that might look like.

[Emilie Kornheiser, Chair]: Sometimes we sort of ask them to go out and then come back and bring the fee

[Jennifer Carbee, Office of Legislative Counsel]: back to

[Emilie Kornheiser, Chair]: us. Yeah.

[Jennifer Carbee, Office of Legislative Counsel]: It is based on actual costs, at least. So I think that is the current narrowing. But yes, if you want to put any kind of additional parameters on it, certainly do that.

[Emilie Kornheiser, Chair]: Any other oh, representative Ode.

[Carol Ode, Member]: Thank you. I had a question about that same thing. The treasurer may require that reasonable fees be charged to to defray program costs. So wouldn't the treasurer shouldn't the treasurer have to come back to us?

[Emilie Kornheiser, Chair]: I think that's an open question that we need to talk to the treasurer about. Okay. And then later on, it says the the monies stay in the fund. So

[Carol Ode, Member]: do we want to indicate that at a certain amount that those remaining funds get transferred to somewhere else?

[Emilie Kornheiser, Chair]: I think there's a question of if we even need a special fund at all. And so I want to ask the treasurer's office that as

[Jennifer Carbee, Office of Legislative Counsel]: well. In addition, one of the things that House Health Care added was having the balance in the fund be part of the annual report. So at least there's some annual tracking of what's in there.

[Emilie Kornheiser, Chair]: Alright. And so and then the last question is on page one, it says to all

[Carol Ode, Member]: Vermont residents. But we did hear that it's really more than just Vermont residents. So I wonder if you want to change that, expand

[Jennifer Carbee, Office of Legislative Counsel]: that. You certainly can. This was, I believe, the language that was provided to me originally by the treasurer's office. So it does not define Vermont residents, but certainly the description that you heard was potentially broader than, I think, other definitions of Vermont residents that use.

[Carol Ode, Member]: I almost feel like it's it's it's anyone who can provide an addra a name, address, and whatever the third thing is that has a Vermont address. So I I know.

[Jennifer Carbee, Office of Legislative Counsel]: Don't know what to do about follow-up on that one as well.

[Carol Ode, Member]: Okay.

[Emilie Kornheiser, Chair]: Thanks, representative Ode. That was a good catch. Any other questions for Jen?

[Bridget Burkhardt, Clerk]: Really?

[Emilie Kornheiser, Chair]: I I have a I don't if it's a question for Wait. Wait. No. Represent Branagan has one.

[Carolyn Branagan, Member]: So section four, the fee. So this fee, we don't know the amount of the fee yet, and we don't know even if it will be yet. And to whom will we charge it? The the consumer. Right?

[Jennifer Carbee, Office of Legislative Counsel]: It'll be charged to participants is the way this so in section four, report includes any fees to be charged to participants. And I believe that the where it gives that authority to establish a fee, it doesn't specify who it would be charged to, but I believe that is the intent.

[Emilie Kornheiser, Chair]: There was a good graphic in the treasurer's presentation about sort of who charges the fee and then where the money goes, but it is not explicit in the language.

[Jennifer Carbee, Office of Legislative Counsel]: Right. I think there's a fee, I believe, between the pharmacy and ArrayRx that is not this fee. Yes. This fee, it would be for participants to participate. Because that would be what would be the Vermont based cost. So that money is not,

[Emilie Kornheiser, Chair]: I don't think that money is ever given to Vermont.

[Jennifer Carbee, Office of Legislative Counsel]: Well, allows the treasurer to require reasonable fees to be charged to defray program costs. So I think to the extent it is costing Vermont money to participate separate from the initiation fee to join a rarex, if there are costs involved with participation that then participants can be charged, although here it has different ticket.

[Emilie Kornheiser, Chair]: Slightly can you bring the language back up? That's different than how they I don't know if I thought

[Carolyn Branagan, Member]: I put it. Sorry.

[Emilie Kornheiser, Chair]: You just put up.

[Jennifer Carbee, Office of Legislative Counsel]: On my screen again. That's helpful. Sorry.

[Emilie Kornheiser, Chair]: It sounds that's slightly different than how it was explained to us, so I wanna make sure the language matches the way it's envisioned.

[Jennifer Carbee, Office of Legislative Counsel]: That's the only So there is the other piece of the language that I think is what representative Branagan was mentioning was the the report back includes any fees to be charged to participants.

[Emilie Kornheiser, Chair]: And that's just the report back?

[Carolyn Branagan, Member]: That's just the

[Nolan Langfeldt, Joint Fiscal Office]: report back.

[Emilie Kornheiser, Chair]: And then the fee authority was just that support.

[Jennifer Carbee, Office of Legislative Counsel]: The fee authority was just that yep. Can charge participants? No. I mean, it has said know, we just talked about whether you want to broaden it beyond being available to all Vermont residents. But I mean, a participant would be somebody with a card.

[Charles Kimbell, Ranking Member]: It would be the pharmacy.

[Jennifer Carbee, Office of Legislative Counsel]: I don't I don't believe so. I don't mean, I have not heard any conversation about the state charging pharmacies for participation. I think there is I think you heard that there was some financial relationship or some fee going between the pharmacy and ArrayRx.

[Emilie Kornheiser, Chair]: So the way it was described to us was that a fee is charged as part of the price and then essentially sort of held by the pharmacy and then remitted, then a portion of that, then that's remitted to

[Jennifer Carbee, Office of Legislative Counsel]: I will defer the the charge. Think we need to Yep. Yep. Straighten mechanism of the language for changes that we made to make them. Yeah.

[Emilie Kornheiser, Chair]: I was

[Bridget Burkhardt, Clerk]: just thinking that if they I don't know how much we need to put language in about it, but if we were to charge a fee as a state for participants, then there would have to be some contractual agreement. If you're literally just signing up on your phone and somehow the state is charging a fee for people to participate, there would need to be some agreement, some mechanism for us to do that fee either directly or it would have to flow through that whole process. Right.

[Jennifer Carbee, Office of Legislative Counsel]: And you would want people to be aware that there was a fee when they signed up.

[Bridget Burkhardt, Clerk]: Right. But then you would also have to agree with ArrayRx and the pharmacy that that fee gets passed along that whole chain to eventually end up Or would we have to

[Jennifer Carbee, Office of Legislative Counsel]: be separate? I think it depends how you would wanna do it. I think people could pay a fee to the state that would aggregate it and pay it to OREOX if we had costs associated with participation in a state. Or, you know, I think in this case, it could be paid directly by the driver's office and recouped through these. You know, I think there are different ways of setting it up depending on who's administering it and how they wanna set it

[Emilie Kornheiser, Chair]: up. Okay. Yes, and I want to caution us from hypothesizing too far into what should be done, because I think a clear vision was described to us, so we just want to make sure the language lines up with that.

[Nolan Langfeldt, Joint Fiscal Office]: Yeah, Rebecca Holcombe. Can we terminate, can Vermont terminate from this state collaborative at any time without any cost to the state?

[Jennifer Carbee, Office of Legislative Counsel]: I believe you heard from the treasurer's office that they expect to see that as part of the contractual arrangement. There's nothing in the legislation that addresses our specific arrangement with our Rare Acts.

[Emilie Kornheiser, Chair]: We could be clear in the statute that that would be required in the project. Anything else for Jen? We're gonna I said, I'm

[Jennifer Carbee, Office of Legislative Counsel]: gonna call Noel and I would grab him.

[Emilie Kornheiser, Chair]: That, thank you so much Jen for your flexibility on that. Yes.

[James Masland, Member]: Well, flexibility is 50,000. Yeah. That's an appropriation.

[Emilie Kornheiser, Chair]: Hi, Nolan. Hi. Thanks for being in two places at once.

[Nolan Langfeldt, Joint Fiscal Office]: This should be vast. I think everything that can be said has been said. I just haven't said it yet.

[Emilie Kornheiser, Chair]: I haven't asked you to know if that's true. Thank you for the computer love. Teamwork.

[Nolan Langfeldt, Joint Fiscal Office]: All right. So for the record, Noel Langwell, the joint fiscal office. The fiscal impacts for this are section five of the bill with appropriate $50,000 from the general fund to the treasurer's office and these are for costs of developing and implementing the plan. I think you also have the treasurer say they're gonna be the ones who are marketing it and trying to drive utilization into the plan. And then section 1C, this would allow the treasurer to charge fees to defray program costs based on actual costs. And they also heard that the bill also would create a special fund.

[Carolyn Branagan, Member]: Do you think we

[Emilie Kornheiser, Chair]: need a special fund? Nolan, do you think we need a special fund?

[Nolan Langfeldt, Joint Fiscal Office]: Oh, don't get me started.

[Emilie Kornheiser, Chair]: I'm serious, actually. What do you see as the value of a special fund in this context, and what would be the detriments of a special fund in this context?

[Nolan Langfeldt, Joint Fiscal Office]: No, I haven't actually thought about that specific to this. I can say that traditionally, special funds are often created because we want to dedicate money from a certain fee or from a certain thing to quarantine it off for this specific purpose. Legislature has gone back and forth. At one point we had so many special funds that the bonding agencies were like, You guys don't actually have a lot of general fund. We're like, but we have all these state dollars, but they were in all these funds. So several years ago at BAA, we combined a lot of our special funds, for instance, State Healthcare Resources Fund, and hundreds of millions of dollars from that went into special fund because was that fund we just had to pay for Medicaid, but we're also using general fund for Medicaid, so it didn't make sense to have a special fund. As you know, you have special funds for different fees, for fishing licenses and stuff like that. For this particular thing, what would go into the special fund would be fees or monies that were donated. And I don't know, I don't have a bill in front of me, actually there was, it was, any money is appropriated from the General Assembly, any money is transferred to the fund from the federal government, any monies from payments of fees or monies due to the program, any gifts, grants made to the fund, and etcetera. So if we suspect that we were gonna get lots of fees from this program or donations, then it might make sense because then the money can be allocated specifically towards it. I don't have an opinion specifically about whether we should or shouldn't create a special fund other than the fact that I'm not a fan of us having too many special funds. I think there's a special firm report. We probably have hundreds and hundreds of special funds. So, I appreciate the question. I don't know that I can weigh in on whether it's a good idea or not, other than the fact that I

[Emilie Kornheiser, Chair]: Your appreciate pros and cons were helpful enough. Thank you.

[Nolan Langfeldt, Joint Fiscal Office]: Yes, appreciate you asking the question.

[Mike Pieciak, Vermont State Treasurer]: Can I ask you

[Charles Kimbell, Ranking Member]: this way? Could joint fiscal office track the revenues coming from fees or other services related to this program without the creation of a special fund?

[Nolan Langfeldt, Joint Fiscal Office]: I think that the finance and management could.

[Emilie Kornheiser, Chair]: And the treasurer's office.

[Nolan Langfeldt, Joint Fiscal Office]: And the treasurer's office could.

[Charles Kimbell, Ranking Member]: Yeah, okay. So you have that ability without a creation of a special file.

[Nolan Langfeldt, Joint Fiscal Office]: I think so, but I would defer to them to answer that question, because I don't know what their capacities are.

[Emilie Kornheiser, Chair]: And then the fee, how do you use the Numbers language? It just says

[Nolan Langfeldt, Joint Fiscal Office]: they can create a fee. It doesn't say how much that fee should be. And that's a treasure question about how would they determine what the fee would be. Maybe they have to come back, I don't know what the process is. They have to ask you for it. I don't know the process for that.

[Emilie Kornheiser, Chair]: Can you show us the other parts of the facility? Sure. Lots

[Nolan Langfeldt, Joint Fiscal Office]: of words. I just do a bill summary talking about, I think, everything that Treasurer had talked about. I just talked about the purpose of what they're trying to do. I tried to put short bill summaries about what the bill is trying to do in these fiscal notes. And then it's just summarizing that they would establish a fund which we talked about. And then I just provided a little bit of background again, all stuff that I think the treasurer had touched upon. So I don't like to just do a fiscal note that just says, here's the money, I like to give some background, but that's my style.

[Emilie Kornheiser, Chair]: Thank you. One last question for

[Charles Kimbell, Ranking Member]: In healthcare, was there any kind of discussion about what other states had realized in terms of the fees or funds coming back to them through the program?

[Nolan Langfeldt, Joint Fiscal Office]: Unfortunately, was not in the room for most of the testimony. I don't know if Jen was or someone from the Treasury. Again, I apologize for not having a whole lot of answers today. Great question, John.

[Emilie Kornheiser, Chair]: So

[Carolyn Branagan, Member]: I missed some time. I was in the Senate, then I was out sick.

[Nolan Langfeldt, Joint Fiscal Office]: I remember. I'm back.

[Carolyn Branagan, Member]: Are there any other departments or areas where we give away our in law authority to establish fees to anybody else? No. Because Did you say no?

[Nolan Langfeldt, Joint Fiscal Office]: No, I said, Oh. I didn't say no. I do, I do.

[Carolyn Branagan, Member]: It used be in the old days. That was ways and means. Nobody else. Well, we did give

[Emilie Kornheiser, Chair]: it away with fish and wildlife, but I think we're having a open conversation about whether that was an appropriate choice we made. Okay.

[Carolyn Branagan, Member]: Well, very good. We should, and I wanna be part of that. But so anybody else besides Bridget Burkhardt?

[Emilie Kornheiser, Chair]: I am not aware. I think that's a great question for Ted. Or do you?

[James Masland, Member]: I know you just walked in.

[Emilie Kornheiser, Chair]: Sorry, Kirby. Hi. You probably should have waited two minutes to walk in. Kirby Keelip said of counsel. I can look into that. I think there might be a coincidence that is where

[Charles Kimbell, Ranking Member]: that's not.

[Carolyn Branagan, Member]: Oh, he's really interested in that.

[Emilie Kornheiser, Chair]: Any other questions for Nolan? Okay. Thank you, Nolan. Appreciate your time back across the street. We're gonna take a ten minute break, and we'll be back here at 10:35 to look at property tax classifications. Thank you, everyone.