Vermont Treasurer, Teachers Agree on Health Care Waiver Plan

Vermont State Teachers’ Retirement System trustees approved a recommendation to implement an employer group waiver plan for retirees on Medicare, state treasurer Beth Pearce announced Tuesday.

According to Pearce, Vermont expects to save as much as $2.3 million annually in Medicare retiree prescription drug costs and reduce its unfunded liability related to long-term health costs by about $150 million, or 18% of the liabilities from the last actuarial valuation.

Pearce’s office, in partnership with the Vermont National Education Association and the Vermont Health Educational Initiative, developed the proposal.

“This initiative is a great example of how partnerships can result in measures that save taxpayer money,” said Pearce. “By working together, we’ve come up with an approach to providing prescription drugs that preserve the benefits our Medicare retirees enjoy today, while also promoting cost savings for the state.”

The educational initiative, in partnership with Blue Cross Blue Shield of Vermont, will provide prescription drug benefits to Medicare-eligible retirees that match the current plan, but at a lower cost to the state. The cost savings, said Pearce, come from leveraging pharmaceutical discounts and government subsidies. Additionally, participation in the waiver plan allows the State to receive subsidies for low-income retirees.

In 2011, Pearce’s office prepared an application for reimbursement under the federal early retirement reinsurance program on behalf of the teachers’ retirement system. The system received about $4.5 million in one-time federal funds to reimburse retiree health care expenditures.

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