The National Taxpayers Union and Republican State Senator Robin Titus (SD-17) filed a lawsuit yesterday (see below) challenging the constitutionality of SB420, a law passed unilaterally by the Democratic majority which established a public health care option to be implemented in Nevada by 2026.

Spearheaded by Democratic Senator Nicole Cannizzaro (SD-6), the public option was passed during the 2021 Legislative Session on a party-line vote and signed into law by former Democratic Governor Steve Sisolak.

The law requires insurers to provide a public option through the state’s health insurance exchange at reduced rates for the elderly, disabled, pregnant, and poverty populations. Critics cite that the net effect of the public option would result in increased health insurance rates and potentially less insurance choices for anyone above the poverty line.

Per the fiscal notes provided with the legislation, the estimated cost to Nevadans is $77 million in the first year of implementation and $200 million in the following years.

At the time, the Nevada chapter of the National Federation of Independent Business warned, “Insurers are raising premiums on businesses to make up for the losses they are enduring in providing Medicare and Medicaid. A government mandated state-run plan like this will only exacerbate the cost shift problem. It will increase health insurance costs for over 1.5 million Nevadans who get their care through employer- sponsored insurance.”

The defendants in the suit include: Republican Governor Joe Lombardo, Democratic Treasurer Zach Conine, NV Director of DHHS Richard Whiteley, Commissioner of Insurance Scott Kipper, and Executive Director of the Silver State Health Insurance Exchange Russell Cook.

The lawsuit alleges that the law violates the Nevada Constitution in three ways: the law was not passed by the necessary two-thirds majority vote of legislators which is required to pass any bill that generates public revenue; the law gives the State Treasurer and the DHHS unlimited discretion to use an unknown amount of state funds for unspecified purposes that state lawmakers did not approve; and, violates the separation of powers principle.

According to the Nevada Independent, “Filing of the lawsuit comes just days after state officials filed a waiver to seek federal funding to support the proposed public option program on Dec. 29. Federal officials have 45 days to determine if Nevada’s application is complete and an additional 180 days (including a 30 day public comment period) to evaluate the application.”

In October last year, Governor Lombardo announced his plan to transform the Nevada Public Option into a Market Stabilization Program. According to the announcement, the program will bring greater stability to Nevada’s individual market for health insurance by reinvesting 1332 waiver funds back into the marketplace and provider system.

Senator Robin Titus M.D, told The Globe: “I will reiterate that one of the main reasons I ran for public office was over-regulation of health care by government bureaucrats who had never been in the trenches fighting for patients and their families. Improving access to healthcare has always been a priority of mine.”