Nevada may be 3rd to cross the Public Option finish line, but theirs might be the first real one
Earlier today I wrote about the imminent final passage of Colorado's much-ballyhooed "Colorado Option" bill to create a quasi-public option at the state level. If that happens, it would make Colorado the second state to implement such a system.
At the same time, however, Nevada is also in the process of moving their own Public Option bill through the state legislature. I honestly haven't been keeping track of this one lately (there's a lot of healthcare happenings to keep abreast of, folks!), but it sounds like a pretty big deal.
While (assuming it gets passed, signed and implemented) it won't have the bragging rights of being either the first or even second state to do so, it should have a much more important claim to fame: The first true state-level Public Option. As the great Louise Norris notes:
Washington already has a quazi public option program, and Colorado is considering one. Nevada's current legislation aims to create more of what people actually think of as a "public option"
— Louise Norris (@LouiseNorris) May 27, 2021
I'll let Norris do the heavy lifting here:
Nevada S.B.420, introduced in late April 2021, calls for the state to create a public option health plan that would be available in the individual market as of 2026, and possibly also in the small group market. Medical providers who contract with the Nevada Medicaid program or the Nevada Public Employees’ Benefits Program would be required to also contract with the public option, and reimbursement rates would be “comparable to or better than” the amount that Medicare pays providers.
Note that timeline...it wouldn't actually be available for enrollment for another 5 years. While there may be some purely political gamesmanship involved as well, that timeline is also a testament to how complicated it is to create a whole new state-run administrative apparatus and perfom the complex legal, financial, regulatory and negotiating work needed to pull something like this off.
As I just noted re. the Washington and Colorado plans, the Nevada plan (as it stands now) would attempt to check off both of the critical boxes needed in order to make a PO actually work: Healthcare provider participation and mandated reimbursement rates for those providers. The big question is what those rates would look like.
The public option would include at least one silver-level plan and one gold-level plan that would be available through Nevada Health Link. Premiums for the public option plan would initially be 5% lower than the benchmark plan premium (as of 2024, adjusted by the Medicare Economic Index), and the program would target a 15% reduction in premiums over the next four years.
Vox’s Dylan Scott has interviewed Nevada Senate Majority Leader Nicole Cannizzaro about S.B420; Cannizzaro explains the goals of the program, why it’s needed in Nevada, and lawmakers’ hopes of passing the legislation before the session ends on June 1. As has been the case with public option bills in other states, however, the idea is certainly not without controversy, and has drawn criticism from health care providers who worry that their reimbursement rates will be lower under the public option program.
...which, of course, is exactly why participation would have to be mandatory (for at least some providers) in order for it to be successful.
Health insurers that participate in the state’s Medicaid managed care program would be required to submit a public option proposal; other insurers could also submit a bid.
...some experts contend that, considering most uninsured people already qualify for Medicaid or ACA subsidies, the public option may not be the most effective vehicle for expanding coverage — but could put downward pressure on health care costs.
In our interview, Cannizarro presented it as both: a chance to cover the uninsured and to use the state’s leverage to address health care affordability.
(I'm presenting a pared down version of Scott's Q&A...read his piece for the full exchange):
Q: Have you settled on payment rates?
A: We do have in the bill that the floor would be at least Medicare rates or better...There’s no prohibition in terms of the procurement for them to negotiate rates that are higher, and that’s what we would envision. They’re going to be paid a fair amount for the services that they are providing.
Q: Do you expect most health care providers would take the public option plan unless they were willing to lose all these other covered patients?
A: Absolutely. We are trying to make sure that this is a statewide plan. That’s so hard here in Nevada; especially for our rural communities, access to health care is difficult.
Q: Is this about cost containment or covering the uninsured?
A: One of the interesting pieces about Nevada is that we have a relatively high uninsured rate, about 11 percent...So we have had Medicaid expansion here in the state, yet we have this persistently high uninsured rate.
...There is still this population that is not being served by what we currently have — not employer-based plans, not the exchange, not Medicaid. If we can lower premiums, that would incentivize and bring people onto the public option. So that’s really where we decided that we would implement the 5 percent, and then 15 percent over four years.
Again, as I've noted before: 5-10% sounds feasible to me; 15% seems to be pushing it...but who knows what the situation will be four years from now?
Q: Had you all looked at other models?
A: Nevada is in a bit of a unique position with so much of our population being uninsured...We passed a resolution in the 2019 legislative session, and that specifically asked for the state to look into the feasibility of a public option and explored a couple of different options.
One was a public option. Then one was a buy-in to the state employee benefits program. That gets a little tricky...
...Additionally, I would note, because we’ve built in some lead time here for procurement and, ultimately, implementation of the public option, one of the things that’s contemplated in the bill as well is that we will be able to do actuarial analysis in the interim that we feel is appropriate.
...which goes right back to my point above about the 2026 implementation date and the difficulty of getting this right.
My friend Laura Packard notes that SB 420 is scheduled to be heard by the Nevada Assembly Ways & Means Committee tomorrow morning...in an op-ed, she notes one of the main reasons why I personally support most of these various PO bills even though I don't think they're likely to reduce premiums by all that much:
The existing individual health insurance market in Nevada can be unstable. At the end of 2017, I had to find a new insurer because Anthem pulled out of the Nevada ACA market entirely. So I had to go through the whole process of figuring out which insurer covered my oncologist, cardiologist, and medical team, and then had to get reauthorized to see my doctors. We should not have to worry about losing our care team and needing to find new doctors, especially in the midst of this pandemic.
The instability of limited providers in the market a few years ago meant that briefly some counties in Nevada were “bare”, with no insurance providers at all. We need more options and competition in the market, to serve all Nevadans.
The "bare county" issue which caused such a panic a few years back in states like Arizona aren't really a problem these days; the ACA has gotten over the hump and is actually bringing more carriers into the ACA exchange market. HOWEVER...things can change quickly, and I'd rather not be in a position of any county ever facing the prospect of not having any ACA-compliant options available in the future (or, alternately, of facing a debacle like the one in Charlottesville, Virginia a few years ago.
Whether it ends up reducing net costs for enrollees slightly or significantly, at the very least, having the certainty of a state-mandated healthcare plan which a decent network of healthcare providers are guaranteed to participate in makes a Public Option worth it to me on that merit alone.