State Treasurer and legislative leaders push program that could save hundreds of dollars monthly—but critical details about insurance deductibles and pharmacy participation remain unclear

by Compass Vermont

Vermont State Treasurer Mike Pieciak announced legislation Thursday, January 8, to provide state residents with a free prescription drug discount card through a multi-state purchasing consortium, positioning the initiative as emergency relief for thousands of Vermonters facing steep insurance premium increases in 2026.

The proposal, introduced as House Bill H.577 and Senate Bill S.199, would make Vermont the latest state to join ArrayRx, a public-sector drug purchasing cooperative currently operating in Oregon, Washington, Nevada, and Connecticut. The program offers discounted prices on prescription medications for people without insurance coverage, or when the discount beats their insurance price.

But while the announcement emphasizes potential savings—Connecticut residents have saved an average of $200 to $277 per prescription since that state launched its program in October 2023—the proposal comes with significant caveats that weren’t included in the Treasurer’s press release.

The 2026 “Fiscal Cliff” Driving the Proposal

The timing of Vermont’s proposal stems from a nationwide health coverage crisis unfolding this year. Enhanced federal subsidies for health insurance purchased through the Affordable Care Act marketplace expired on December 31, 2025, after Congress allowed temporary expansions to lapse.

Those subsidies, originally enacted in 2021 and extended in 2022, had made health insurance significantly more affordable for middle-income families. According to the Kaiser Family Foundation, their expiration is projected to cause an average 114% premium increase for marketplace enrollees in 2026—an additional $1,016 per person annually.

Health policy analysts estimate that approximately 4.8 million Americans will drop their coverage this year due to unaffordable premiums. Many others will downgrade to high-deductible catastrophic plans to save money on monthly premiums, leaving them essentially paying cash prices at the pharmacy counter until they meet thousands of dollars in deductibles.

“We’re seeing families choosing between filling a prescription and putting food on the table,” Pieciak said at Thursday’s announcement alongside Rep. Alyssa Black, chair of the House Health Care Committee, and Sen. Ginny Lyons, chair of the Senate Health and Welfare Committee.

How the ArrayRx Program Works

The ArrayRx discount card operates differently from standard insurance. Vermonters would sign up for a free card online, then present it at participating pharmacies when filling prescriptions. The pharmacy processes the transaction through ArrayRx’s system, charging the negotiated discount price rather than the pharmacy’s standard “cash price.”

The program achieves its discounts through collective bargaining power. By pooling multiple states’ populations—ArrayRx now represents millions of potential customers—the consortium negotiates lower prices with drug manufacturers and pharmacies. The program is managed through a contract with Navitus Health Solutions, a pharmacy benefit manager, with Moda Health handling operational logistics.

What distinguishes ArrayRx from commercial discount cards like GoodRx is its governance structure and pricing model. The consortium is governed by state health officials rather than private investors, and operates on a “100% pass-through” model where manufacturer rebates flow entirely to consumers and states rather than being retained as profit. A 2023 independent audit by PillarRx verified this transparency claim.

The card is accepted at over 65,000 pharmacies nationwide, including major chains and many independent pharmacies, and can deliver savings “up to 80%” on generic medications. Brand-name drugs typically see more modest discounts of 15-20% because manufacturers control pricing for patent-protected medications. Mail-order service is available through Postal Prescription Services and Kroger.

The “Deductible Trap” Not Mentioned in the Announcement

Here’s what the Treasurer’s press release didn’t explain: Money spent using a discount card typically doesn’t count toward a health insurance deductible or out-of-pocket maximum.

For a healthy person who rarely meets their deductible, this doesn’t matter—they save money on prescriptions and move on. But for someone with chronic conditions or facing a serious illness, using the discount card creates a hidden financial risk.

Consider a Vermont resident with a high-deductible health plan carrying a $3,000 annual deductible. If they use the ArrayRx card to save $20 on monthly prescriptions throughout the year, they save $240—but make zero progress toward that deductible. When processed through the discount card, the transaction happens outside the insurance system.

If that same person later faces surgery or hospitalization, they effectively start from zero when accumulating charges toward their deductible. They could end up paying far more out-of-pocket for their major medical expenses than if they’d paid higher prices for prescriptions through insurance all year.

The ArrayRx FAQ page does disclose this limitation, stating that discount card purchases “will not count toward your deductible or annual out-of-pocket maximum.” But the Treasurer’s announcement framed the card as straightforward savings “whenever the discount gets a better deal,” without warning of potential downstream costs.

For people who are uninsured or in Medicare’s “donut hole” coverage gap, this trade-off doesn’t apply—they have no deductible to meet. For them, the card represents unambiguous savings. But for underinsured Vermonters with high-deductible plans, the decision requires careful calculation of their expected annual health needs.

Community Pharmacy Concerns About Reimbursement

The announcement’s emphasis on “negotiating lower prices” also glosses over tension with independent pharmacies, which often view discount card programs with concern.

While consumers see lower prices as a benefit, those prices are partly achieved by reducing what pharmacies receive for dispensing medications. Independent pharmacists report that discount cards sometimes reimburse them at rates below their acquisition cost for the drug, or eliminate dispensing fees that cover the pharmacist’s time and expertise.

“The answer is complicated,” the American Pharmacists Association noted in analyzing discount cards. While they help patients afford medications, they can squeeze pharmacy profit margins to unsustainable levels.

If Vermont independent pharmacies find ArrayRx reimbursement rates too low, they may decline to accept the card, creating gaps in access—particularly in rural areas where a single pharmacy might serve an entire region. The legislation requires annual reporting on “pharmacy participation,” suggesting lawmakers recognize this as a potential problem worth monitoring.

The Vermont Medical Society, represented by Deputy Director Stephanie Winters, supported the proposal at Thursday’s announcement, indicating physicians view cost as a critical barrier to medication adherence. But pharmacy organizations weren’t mentioned among the supporters.

Connecticut’s Mixed Track Record

Vermont’s proposal follows Connecticut’s October 2023 launch of an ArrayRx program, which the announcement cited as a “clear model for success.”

Connecticut data shows the average user saves substantially—between $200-$277 per prescription on average. The most commonly discounted medications include Rosuvastatin, Metoprolol, and Lisinopril—generic drugs for cholesterol and blood pressure management.

But Connecticut has struggled with adoption. Despite a population of 3.5 million, only approximately 24,000 residents have signed up—a penetration rate below 1%. Connecticut Comptroller Sean Scanlon admitted last year that “a lot more people should be signing up” and launched a gamified “Town vs. Town Enrollment Challenge” to boost participation.

Vermont’s smaller population of roughly 647,000 means achieving meaningful purchasing power requires a higher percentage of residents to participate. Simply passing the legislation won’t deliver results without sustained public education campaigns—likely requiring coordination with town clerks, libraries, and community health centers to reach people who would benefit.

Who Supports the Proposal

Beyond the Treasurer and legislative committee chairs, support comes from several Vermont advocacy organizations.

Mike Fisher, Vermont’s Chief Health Care Advocate, endorsed the program as consumer protection. AARP Vermont, represented by Director Greg Marchildon, backed the initiative, noting its value for seniors facing gaps in Medicare Part D coverage.

Rep. Black emphasized the urgency facing her constituents. “With enhanced ACA subsidies expiring, thousands of Vermonters risk losing coverage or face significantly higher costs,” she said.

The bill would place the program under the State Treasurer’s Office rather than the Department of Health, treating prescription drug affordability as a financial security issue rather than purely a health policy matter. The legislation creates a “Vermont Prescription Drug Discount Card Program Fund” to handle any fees and costs, though the card itself would be free to consumers.

What Happens Next

H.577 was introduced Monday, January 6, and referred to the House Health Care Committee, which Black chairs. The committee is scheduled to hold its first hearing on the bill next week.

The simultaneous introduction of companion legislation S.199 in the Senate by Lyons suggests coordinated strategy to move quickly through both chambers. With both health committee chairs sponsoring the legislation and the Treasurer providing executive branch support, the bill faces few obvious political obstacles.

If passed, Vermont would become the fifth state in the ArrayRx consortium. Implementation would require negotiating administrative details with Navitus, establishing the discount card portal, and launching a public awareness campaign.

The legislation requires the first annual report to the Legislature by January 15, 2028, detailing enrollment numbers, participating pharmacies, and total savings achieved. Those metrics will determine whether Vermont’s program avoids Connecticut’s low-adoption problem and actually delivers relief to the thousands of residents facing the affordability crisis of 2026.

For Vermont residents evaluating whether to use the card once available, the decision won’t be as simple as the announcement suggested. Those without insurance should benefit clearly. Those with high-deductible plans will need to carefully consider their likely annual health expenses before choosing immediate prescription savings over deductible progress.