Carson City District Court Judge Kristin Luis dismissed a lawsuit challenging Nevada’s public health insurance option last month, citing a lack of standing or proof of harm. The lawsuit was filed by state Sen. Robin Titus (R-Wellington) and the National Taxpayers Union, a conservative taxpayer advocacy group. They challenged the constitutionality of SB420, the 2021 public health care option law. Nevada is one of four states that have adopted a public option law aimed at lowering insurance premiums. This law requires insurers who contract with Nevada Medicaid to offer a discounted insurance plan on the state’s health insurance marketplace, and it is set to begin in 2026.
The dismissal filed on July 30 stated that the injury claims were “purely speculative” since the law is not yet in effect, and standing cannot be established just because someone is a taxpayer. The order also mentioned that to bring a successful lawsuit against the public option in the future, plaintiffs would need to demonstrate actual harm caused by the legislation and properly name the state of Nevada, along with state officials and employees, as defendants in the lawsuit.
The state-managed public health insurance option aims to leverage the state’s purchasing power with Medicaid managed care organizations to get insurers to offer public option plans. These plans will resemble existing qualified health plans on the state’s health insurance exchange but will be required to be offered at a 4 percent markdown with the goal of reducing premium costs by 15 percent over four years.
Titus and the National Taxpayers Union’s legal challenge, filed in January 2024, claimed that the law violates the Nevada Constitution in three ways. One of the claims is that it generates public revenue but was not passed by the required two-thirds majority vote of legislators. The lawsuit also alleged that the law gives the state treasurer and Department of Health and Human Services director “nearly unlimited discretion to use unspecified amounts of funds from the state treasury for unspecified purposes” without legislative approval, violating the separation of powers principle.
This legal challenge is part of Nevada’s efforts to implement a state-managed public health insurance option by 2026. The opposition from insurance industry leaders and the attempt by Republican Gov. Lombardo’s administration to rebrand the law as a “market stabilization program” with a reinsurance component have added complexity to the situation.
Reinsurance programs function as insurance for insurance companies, helping to lower premiums for individual health insurance plans by paying a portion of high-cost claims. State officials filed a waiver to seek federal funding for the proposed public option program late last year and are currently accepting bids for the project.