State Sen. Robin Titus (R-Wellington) and the National Taxpayers Union filed a lawsuit Tuesday in Nevada's First Judicial Court in Carson City challenging the constitutionality of SB420, the 2021 law establishing a state-managed public health care option in Nevada.

The legal challenge says that the law violates the Nevada Constitution in three ways, including that it generates public revenue but was not passed by the required two-thirds majority vote of legislators. 

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.

Titus, a Republican lawmaker and medical doctor who voted against the bill during the 2021 session while she was serving in the Assembly, didn’t return a call from The Nevada Independent on Wednesday seeking comment. In a statement published on the National Taxpayers Union website, Titus said the public option “will worsen our state’s already severe shortage of doctors and nurses, harm Nevadans’ access to quality health care, and drive costs even higher.” 

The lawsuit also alleges that the public option 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” the Legislature did not approve and violates the separation of powers principle by “impermissibly delegat[ing] lawmaking authority to executive branch agency directors” without any guardrails.

A spokesperson for Gov. Joe Lombardo, who is named as a defendant in the lawsuit, said the governor's office cannot comment on pending litigation.

The lawsuit is the latest challenge in the state’s ongoing saga to implement a state-managed public health insurance option by 2026, amid opposition from industry leaders and an attempted rebranding of the law by Lombardo’s administration as a “market stabilization program” through establishing a reinsurance program as part of the public option implementation.

Reinsurance programs function as insurance for insurance companies, paying a portion of high-cost claims and thus allowing insurers to lower the premiums for individual health insurance plans.