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Nevada Moving Towards Public Option Health Plan with SB420

The state could become the second state offering a public option health plan if the governor signs SB420

June 14, 2021 – Nevada is moving towards a public option health plan with SB420 in the works. The bill is Nevada’s attempt to establish a state-managed public health insurance option.

It cleared the Senate on party lines last week and will be heading to the desk of Democratic Gov. Steve Sisolak. Though he has not taken a public position on SB420, it is unlikely that he would veto it. In fact, according to local news outlets, he has already agreed to sign it.

Third Iteration of Public Health Option Plan

SB420 is the third iteration of the public option proposal in the State of Nevada.

An earlier iteration was vetoed prior by Gov. Brian Sandoval, a Republican, in 2017. At the time, he stated the proposal was “moving too soon, without factual foundation or adequate understanding of the possible consequences.”

However, SB420 is a new take on the public option health plan. “Section 10 requires the Public Option to be available through the Exchange and for direct purchase and authorizes the Director to make the Public Option available to small employers in this State or their employees,” the SB420 bill summarized.

At its core, SB420 requires insurers that bid to provide coverage to Nevada’s Medicaid population to also offer a public option health plan. The public option plans will be available for purchase starting plan year 2026.

These plans will resemble qualified health plans that already exist and are certified by Nevada’s health insurance exchange. However, the proposal requires them to be marked down by 5 percent. The goal is to reduce average premium costs by 15 percent over four years.

In addition, the bill will expand coverage for specific Medicaid services, should excess money be available. This could include doulas and community health workers.

SB420 Impact Unknown

The full impact of the bill isn’t likely to be known until the state conducts an actuarial study of the public option health plan proposal.

This public option health plan would be available through the state health insurance marketplace. As such, it essentially offers all of the same benefits mandated in the Affordable Care Act.

In addition, the premiums for the public option plan would be synced with the Medicare Economic Index (MEI). Increases in premiums would not be able to exceed the increase in the MEI.

While in theory, the bill has benefits, detractors argue that it will destabilize Nevada’s already fragile health care system. Others argue it will increase the state’s doctor shortage.

“If passed, the bill would mandate insurers to offer a public option and mandate physicians and hospitals to accept rates below cost,” Assembly Minority Leader Robin Titus (R-Wellington), a family practice doctor by trade, said on the floor. “Doctors will leave the state and hospitals will raise rates or cut critical elective services that are widely used by all. The net effect is less access to care and higher costs for the remaining Nevadans, just the opposite of what we should want.”

Sabrina Corlette, a research professor, founder, and co-director of the Center on Health Insurance Reforms at Georgetown University has also weighed in on the public option health plan proposal.

“The devil is very much in the details,” Corlette mentioned after stating that it’s important to pay attention to the fine print.

While she is skeptical of the arguments that the public option plan will simply lead to cost shifting elsewhere, she notes that it is impossible to know how negotiations between providers and insurers will play out.

For the full text of SB420, click here.

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