Though the drive to create a public health insurance option has made little headway at the federal level, a proposal to create the country's second state-managed public option is moving forward in the Nevada Legislature, where lawmakers are angling to expand access to health care without upending the insurance market or undermining providers.
A measure sponsored by Senate Majority Leader Nicole Cannizzaro would require insurers that bid to provide Medicaid coverage to also bid to offer a public option plan. State officials would select certain plans for approval and mandate that they charge 5% less in monthly premiums than the average plan on the state insurance marketplace created by the Affordable Care Act and 15% less four years after it is first offered.
In an Assembly hearing Friday, Cannizzaro said the public option would leverage the state's purchasing power to reduce health insurance costs and increase competition for health insurance plans geared toward individuals and small businesses.
Amid the pandemic, she said it was "an opportune moment to take advantage of the state's considerable bargaining power to make health care more affordable and more accessible."
Lawmakers did not vote on the bill on Friday to offer proponents and detractors more time to discuss the measure's fiscal impact.
The legislation would require state officials study the financial implications of the proposal before applying for permission from the federal government to offer the plans on the state-based exchange, which would be available starting in 2026.
Much like on the federal level, the proposal has sparked impassioned pushback from hospital associations, doctors groups and insurance companies. The industry groups say that providers rely on a mix of payers — including Medicaid, Medicare and employer-sponsored insurance — to make a profit. They warn that the price controls could upset a fragile equilibrium, increase reimbursement rates for those who don't qualify for the public option, and exacerbate Nevada's provider shortage.
The Nevada Hospital Association, the Nevada Association of Health Plans and the Nevada State Medical Association are lobbying to reduce the bill to a study. But Cannizzaro has said repeatedly that she isn't interested in delaying implementation.
The public option plan would be open to small businesses and individuals who qualify for federal subsidies on the state-based insurance marketplace. It would not be geared to Medicaid or Medicare recipients, people with employer-sponsored plans or undocumented immigrants.
"If you're eligible for Medicaid, we would seek to get you enrolled in Medicaid," Cannizzaro said. "Individuals who end up being eligible for Medicaid typically sign up for Medicaid because that's going to be the most affordable place for them to be."
Washington created a public option in 2019. Connecticut and Oregon are also considering creating state-based public options. A public option proposal passed through the Colorado Senate on Wednesday.
In Nevada, the effort follows earlier pushes in previous legislative sessions to create such a plan. In 2019, lawmakers passed a proposal to study public option plans that would have allowed people to buy into the insurance plans offered to state employees or offer a state-sponsored program on the state exchange.
The proposal currently under consideration has not been analyzed. But the study found a 10% to 20% reduction in premiums "may not be enough to substantially encourage the currently uninsured to enroll in coverage for the first time."
Republican lawmakers have questioned whether the public option is the optimal strategy to expand coverage to Nevada's 350,000 uninsured residents, when Biden recently expanded eligibility for Affordable Care Act subsidies and when 37% are eligible but not enrolled in Medicaid.
The proposal passed through the state Senate on Monday and has three days to clear the Assembly before the Legislature is scheduled to adjourn.