There is near-universal agreement that the state of health care in Nevada leaves something to be desired.
Nevada has one of the highest uninsured rates in the nation, with roughly 350,000 residents without health insurance. It ranks near the bottom on health care affordability, with nearly half of Nevadans saying health care is too costly. It also ranks at the bottom for overall health care system performance, including access, affordability, prevention and treatment.
Where there is less agreement, though, is what should be done about it.
Nowhere was that more clear than during a Tuesday hearing on a bill to establish a state-managed public health insurance option: Proponents, including progressive organizations and public health advocates, framed the bill as the next step in expanding affordable, quality health insurance that would reduce costs for Nevadans. Opponents, largely health industry representatives and chambers of commerce, said it would do the opposite.
Since its introduction last week, the bill, SB420, has attracted high-profile support at the national level, including from the nonprofit group United States of Care and the advocacy organization Committee to Protect Medicare, as well as opposition, primarily from a coalition called Nevada’s Health Care Future, an arm of the national organization Partnership for America’s Health Care Future, which is made up of some of the health industry’s heaviest hitters. In advance of the Tuesday hearing, advocates and opponents sent out press releases, polls and statements from doctors both in support of and against the legislation.
The polls, however, reveal just how long both sides have been gearing up for a fight over a public option in Nevada this legislative session: They were both taken in February.
At its core, the legislation, which is being debated with less than a month left in the session, would require insurers that bid to provide coverage to the state’s Medicaid population to also offer a public option plan. While the plans would resemble existing qualified health plans certified by the state’s health insurance exchange in many ways, the legislation would require them to be offered at a 5 percent markdown, with the goal of reducing average premium costs in the state by 15 percent over four years.
Because the public option plans would be offered on the state’s health insurance exchange, people who are eligible for federal subsidies under the Affordable Care Act would be able to purchase a fully or partially subsidized public option plan. In addition to being offered both on and off exchange in the individual market, the plans would also be open to the state’s small group health insurance market.
Apart from its public option provisions, the bill also makes a number of changes to the state’s Medicaid program, including, notably, increasing eligibility for coverage for pregnant women in Nevada to up to 200 percent of the federal poverty level. The changes are expected to cost about $73 million, with an impact to the state’s general fund of about $24 million.
State Senate Majority Leader Nicole Cannizzaro, who is spearheading the legislation, said during the hearing that the public option and Medicaid portions of the bill would, collectively, improve access to health care for Nevadans.
“We are more than a year into a global pandemic that has resulted in job loss, and, consequently, the loss of health insurance. People are struggling to ensure they will have access to health care if they get sick, and that is the plain and simple place that we are in reality,” Cannizzaro said. “Now is an opportune moment to take advantage of the state's considerable bargaining power to make health care more affordable and more accessible.”
Proponents testified on Tuesday that the legislation would expand health insurance options for individual Nevadans and small businesses while reducing costs.
“I cannot wait for this plan to be available to us so we can have better and more affordable options for coverage,” said Annette Magnus, executive director of Battle Born Progress. “This plan is another piece of the puzzle in solving the insurance and health care crisis that Battle Born Progress has been working on for years.”
West Wendover Mayor Daniel Corona highlighted the potential impact the legislation could have in expanding coverage in rural Nevada. Among its many provisions, the bill would require all insurers that offer a public option plan do so in every county and both on and off the exchange, preventing any counties from going without an exchange plan, as almost happened in 2017.
“For the first time ever, Nevadans in the most rural areas of our state will be guaranteed access to affordable coverage through a statewide public option,” Corona said.
Jim Sullivan, lobbyist for the Culinary Union, which runs a union health plan called the Culinary Health Fund, called the bill a “good first step” in making sure Nevadans can receive “quality and affordable health care.” A conceptual amendment Cannizzaro presented to the bill on Tuesday would allow the union to offer its health plan as a public option to members who lose health coverage.
“This is important to allow Culinary Union members and their dependents to continue to see their same doctor, not face a gap in must-needed treatments and have access to the same prescriptions and specialists instead of having to start over with a brand-new insurer if they were to lose coverage,” Sullivan said.
The Culinary Union, which sometimes aligns with private health insurance companies on legislation and also has close ties with Democratic lawmakers, was likely the best chance the insurance industry had in heading off the Democratic-backed proposal.
During the hearing, opponents, including doctors, hospitals and private insurance companies, painted a bleak picture of what the legislation would do to Nevada’s health insurance landscape. One of their key arguments against the bill was that requiring premium reductions and setting Medicare rates as a floor would not actually reduce costs but just lead to cost shifting elsewhere.
“When costs exceed the revenues, then adjustments will have to be made. It’s either passed on, typically, passed on through the commercial market — that is employers that are not eligible to participate — or it can impact into the workforce, with jobs,” said Jim Wadhams, lobbyist for the Nevada Hospital Association.
Proponents, however, argued that cost-shifting already happens when doctors and hospitals provide care to uninsured individuals and that care goes uncompensated.
“The question is really, when we talk about cost shifts, because that is a current reality of our system, there’s plenty of money that is being made in the health care space, so when we talk about cost shifts, what are we talking about?” Cannizzaro said. “Here, we are talking about people who are not accessing Medicare, because they don't have health insurance.”
Opponents also suggested during the hearing that instead of pursuing a public option the state should focus on targeting people who are uninsured but either eligible for Medicaid or for subsidies through the state’s health insurance exchange. Together, those two groups represent more than half of uninsured Nevadans.
“We are opposed to this bill. It's well-meaning but we need to figure out why people are not using the programs that we have now first and fix those,” said Susan Fisher, a lobbyist for the Nevada State Society of Anesthesiologists.
Cannizzaro, however, suggested it was contradictory for providers to be talking about enrolling more people in Medicaid when they have long lamented that Medicaid rates in the state are inadequate.
“If we're talking about implementing something where you're getting reimbursed at higher than Medicaid rates, why that's a reason to oppose this bill is just one that I have struggled to understand, in every sense of the word,” Cannizzaro said.
The statewide doctors’ association, meanwhile, voiced support generally for a public option but expressed concerns that setting Medicare rates as a floor would serve as an effective cap. They also pushed back on a section of the bill requiring doctors who contract with Medicaid, the Public Employees Benefits Program and workers’ compensation to participate in at least one public option plan and said the provision could actually lead to doctors backing away from providing care to people covered under those plans.
“We support physicians’ freedom of choice when it comes to health care plan participation, and therefore we oppose the effort to require physicians’ participation in the public option by tying it to the other state-based programs,” said Jaron Hildebrand, executive director of the Nevada State Medical Association. “This mandatory participation provision overlooks the complexities of running a physician practice, the balance involved in determining the capacity and the ability to have a practice that serves a patient mix.”
The association also opposes a provision of the bill requiring payment parity between doctors and advanced practice registered nurses for Medicaid.
Several chambers of commerce also voiced opposition to the legislation, in part because they argued it would undermine the health insurance plans they offer, known as association health plans.
“That is a proven market driven solution based on no premium costs, and comprehensive benefits both buying power for small business,” said Scott Muelrath, executive director of the Henderson Chamber of Commerce.
Opponents also voiced frustration with being left out of the bill drafting process. While the health care industry is often successful at killing legislation it is united in opposing, industry representatives successfully worked together in the 2019 session to reach a compromise to address surprise emergency room billing at the direction of Assembly Speaker Jason Frierson. They suggested on Tuesday that a similar approach could have been taken with this proposal.
“I can tell you that when there are very challenging things that occur within health care, when you lock us all in a room, we tend to find solutions,” said Tom Clark, lobbyist for the Nevada Association of Health Plans.
Several industry representatives urged the committee not to pass the bill as is but amend it or continue to study the issue further.
“We want to work with you and others to see if we can design a program that works for Nevada, without jeopardizing access to care or the current options for coverage as an integrated health care delivery system,” said Mike Hillerby, a lobbyist for Renown Health and its insurance arm, Hometown Health.
Cannizzaro, however, noted that the bill would allow several years for implementation of a public option, with coverage slated to begin Jan. 1, 2026, and also would allow an actuarial study that would assess impacts to the insurance market before such plans are approved.
She also chafed at suggestions that the Legislature study the matter further, when it has been four years since a public option bill was first proposed in Nevada.
“The answer to why we should not support SB420 being that we should continue to look at this, or figure out who these people are, or figure out how we should study this a little bit more — we are past that point. We know who these people are. I've talked to them at the doors,” Cannizzaro said. “I would encourage you, go knock 10 doors in your neighborhood and let me know how many people talk to you about the cost of health care because I'm willing to bet it’s a fair number.”
The committee took no further action on the bill on Tuesday. After it passes out of the Senate Health and Human Services, it will need to go to the Senate Finance Committee to review the bill’s financial impact.