Health care industry proposes amendment to reduce public option bill to actuarial study
Insurance companies, hospitals and doctors have proposed an amendment to Nevada’s public option bill that would gut much of the existing legislation and replace it with a study, effectively delaying a formal decision on whether to move forward with the proposal for two years.
While the most recent draft of the public option bill, SB420, already requires state health officials to conduct an actuarial study of the proposal as part of a four-and-a-half-year ramp up, it also sets the wheels in motion to establish that public option for purchase for plan year 2026. The new industry-backed amendment would instead turn the bill into just an actuarial study — with no timeline or plan for actually implementing a public option — leaving it up to lawmakers in the 2023 session to decide whether to proceed with the proposal.
“I think that it would be prudent from a policy perspective to have a process whereby you move forward with legislation that creates an option that is consistent with the actuarial study instead of putting the public option into statute, have the actuarial study come back, and then have to claw, potentially, items back or add to it,” said Tom Clark, lobbyist for the Nevada Association of Health Plans.
The amendment is being put forward by the Nevada Association of Health Plans, the Nevada Hospital Association and the Nevada State Medical Association. Industry representatives said they delivered the amendment to the office of Senate Majority Leader Nicole Cannizzaro, the bill’s sponsor, early Tuesday evening, though they haven’t yet had a conversation with her about it.
In bill hearings, however, Cannizzaro has made clear that she isn’t interested in simply another study of the concept. Notably, conversations around a different version of the public option proposal turned into a study at the end of the 2019 legislative session.
“I am just at a little bit of a loss of words with some of those comments where, ‘We should study this. We should figure out why people are uninsured. We should figure out why people aren’t accessing health care,’ because that’s a question that's been raised for as long as I've been in this building,” Cannizzaro said during a hearing on the bill earlier this month. “While that's not as long as some, it's a long enough period of time for me to know that it's time to take action.”
Under the public option legislation, as currently drafted, insurers that bid to provide Medicaid coverage would also be required to bid to offer a public option plan. The public option plans would resemble existing qualified health plans on the state’s health insurance exchange, though they would be required to be offered at a 5 percent markdown, with the goal of reducing the plans’ average premium costs by 15 percent over four years.
The new amendment, at its core, is the sum of the many arguments the health care industry has made against the bill during hearings and through a direct campaign to everyday Nevadans, including that a public option would destabilize the health care landscape in Nevada and that there are better ways of reducing the state’s uninsured rate.
Specifically, the amendment would require the proposed actuarial analysis to hone in on individuals who have been uninsured for at least six months and who are not eligible for Medicaid or subsidies on the state’s health insurance exchange — two groups that collectively make up more than half of uninsured individuals in the state. Opponents of the bill, including representatives of the health care industry and chambers of commerce, have argued the Legislature ought to focus on getting those two groups covered first.
To that end, the amendment would also require the Interim Legislative Committee on Health Care to come up with ideas for how to get people who are currently eligible for Medicaid or exchange subsidies but aren’t enrolled signed up for coverage.
“If we’re looking at capturing those who are uninsured currently, what can we do to encourage them to enroll in the programs that they’re already eligible for? That’s a really important part of the equation,” Clark said.
The amendment lists several areas health care industry representatives would like to see the actuarial analysis dive deeper into, including the effect of the public option on the stability of the health insurance market, accessibility of physicians and network adequacy.
It also asks that the study look at the effect of mandating “below market or below cost rates” for providers — a reference to the fact that the bill sets Medicare rates as a floor for provider payments under the public option plan, which providers view as an effective cap. Additionally, the study would analyze what insurance coverage benefits may need to be reduced in the plans to achieve the rate reductions mandated by the bill.
The amendment also directs the actuarial study to look into what federal opportunities might exist to support the public option — which bill proponents already plan to do in the form of federal waivers, though the amendment also leaves room for unnamed “other opportunities” — as well as consider the impact of the federal American Rescue Plan, which opens up health insurance exchange subsidies to people who make more than 400 percent of the federal poverty level.
The amendment only proposes to change the public option portion of the bill, not the secondary portion that expands Medicaid services.
Clark said the additional requirements would provide more of a framework for the actuarial study.
“That actuarial study needs some guardrails,” Clark said. “You can't just say, ‘Do an actuarial study.’”
Under the industry’s proposed amendment, the actuarial analysis would be required to be completed by July 1, 2022, and the director of the Department of Health and Human Services, the insurance commissioner and the executive director of the Silver State Health Insurance Exchange would be required to review the actuarial analysis and submit a comprehensive report on “their collective recommendations for effective implementation of the Public Option in Nevada; improving access to and affordability in Nevada’s health care market; and addressing the challenges of enrolling individuals in Medicaid and the Exchange who are eligible but remain uninsured” by Oct. 1, 2022.
Clark pushed back on any framing of the amendment as an attempt to kill the public option bill — as is often the case with many legislative bills that get turned into studies.
“We feel that this isn’t just a blanket, ‘Kill the bill.’ This is saying, ‘Let's take this major step forward first before we put the policy in the statute’,” Clark said.
The bill passed the Senate on a party-line vote Monday and was referred to the Assembly Ways and Means Committee on Tuesday. It has yet to be officially scheduled for a hearing but will likely be heard in the next day or two.
Read the amendment below: