Nevada's launching one of the first public health insurance options. Here's what to know

By Tabitha Mueller — Nevadans looking for health insurance on the state's Affordable Care Act marketplace this fall have a new, more budget-friendly option to review: Battle Born State Plans.

The plans are the culmination of legislation passed in 2021 building on the Affordable Care Act (ACA) by establishing a public health insurance option at a lower price by reducing premiums. It's a twist on an idea that failed to make it in the final version of Obamacare 15 years ago: a public option that would compete with private insurance.

Approximately 35,000 people are projected to purchase the Battle Born Plans, a number that could vary given rising health care costs and the expiration of certain federal subsidies.

Senate Majority Leader Nicole Cannizzaro (D-Las Vegas), who spearheaded the legislation to establish the public option in 2021, has celebrated the Battle Born State Plans (BBSPs) as key to reducing health care coverage costs and increasing access.

But not everyone has lauded the launch of the new plans.

On the campaign trail, Republican Gov. Joe Lombardo bashed the public option as "bullshit" and called it "political theater" in a 2023 State of the State address. He and other critics of the plans argue it might exacerbate Nevada's health care shortage and potentially drive insurers out of the market.

Later, his administration adopted a reinsurance program as part of the implementation of the plans that he said will stabilize the venture.

Nevada is the third state to launch a public health insurance option after Washington and Colorado.

Below, we break down what you need to know about the Battle Born State Plans and the reinsurance program.

What are the Battle Born State Plans?

Established during the 2021 legislative session, Battle Born State Plans, like other plans available on Nevada Health Link, are "qualified health plans." That means they cover all 10 essential health benefits stipulated under the ACA, including guaranteeing that consumers will not be denied coverage or charged more for pre-existing health conditions.

The only difference between the Battle Born plans and others is they must meet premium reduction targets, with the goal of lowering overall health insurance costs.

To ensure a competitive bidding process for the plans, the state required managed care organizations contracted to deliver services for the state's Children's Health Insurance Program and Medicaid programs to submit a proposal to administer the public option.

Out of eight carriers on the marketplace this open enrollment period, three are offering the state plans:

Insurance carriers offering the plans are required to align their networks with Medicaid managed care networks to ensure sufficient access to care.

How do the premium reduction targets lead to lower costs?

Under Nevada law, carriers offering the new state plans must satisfy premium reduction targets over the next four years, finishing at 15 percent lower than the average premium on the market.

What did plans do to offer lower cost premiums?

To meet the required targets, officials with the Nevada Health Authority said carriers have two options: One is to reduce administrative costs, such as salaries, overhead, and broker costs, and the other is to reduce medical costs, such as provider reimbursements.

Actuaries for the state indicated that for 2026, Battle Born carriers primarily met their targets by reducing the cost of broker fees and commissions. An insurance broker is a licensed professional who helps clients find insurance coverage; they primarily make money through commissions paid by insurance companies on the policies they sell and renew.

What are the enforcement mechanisms surrounding the plans and premium reduction targets?

If carriers don't follow the reductions, the state can impose corrective action plans and issue fines and penalties.

If that noncompliance continues, the state can declare a breach of contract, which could prevent the carrier from participating in large public programs such as Nevada Medicaid.

"After four years, the state intends to examine trend changes to see if carriers will voluntarily maintain the reductions achieved beyond 2029," a health official said. "If not, the state may need to impose additional reductions if necessary through its contract authority with carriers."

Who is expected to purchase the plans?

The majority of enrollees on Nevada Health Link are people who do not have access to employer-sponsored insurance coverage and do not qualify for Medicaid or Medicare benefits. This group includes Nevadans who may be self-employed, owners of a small business or those reliant on contract-based work.

Buying through the marketplace allows consumers access to federal subsidies that can substantially lower the out-of-pocket cost of insurance.

The Battle Born plans are offered to people with moderate-to-higher incomes who shop for their own health insurance on Nevada Health Link. Like every plan on the marketplace, there are no caps on the number of Nevadans who can enroll in the plans.

The plans come as health insurance costs are rising across the country and enhanced ACA subsidies (in the form of tax credits) are set to sunset at the end of the year. The enhanced subsidies increased financial assistance for existing marketplace enrollees and expanded eligibility for tax credits to middle-income earners or those making more than 400 percent of federal poverty levels (nearly $130,000 for a family of four).

Officials with Nevada Health Link said Nevadans who are no longer eligible to receive subsidies, or are receiving lower subsidies than previous years, may also want to take advantage of the Battle Born plans because these products keep costs lower through premium reduction requirements.

They added that Nevadans can also connect with a navigator or a broker to get free enrollment assistance and determine if the plan in their area best meets their needs and budget.

This might be especially valuable to Nevadans in rural areas, where the plans are bringing more carrier participation and more options than have historically been available.

What is the reinsurance program and how does it work?

As implementation of the public option moved forward, Lombardo proposed and adopted a reinsurance program.

Reinsurance essentially works 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.

As reinsurance programs help lower insurance premiums, the amount of federal dollars spent on ACA tax credits also goes down. Instead of keeping those dollars, the federal government passes that money through to the state to help fund the reinsurance program and maintain lower premiums and market stability.

State officials said the savings will be felt marketwide as the reinsurance payments will be available to all licensed carriers in the individual market. The reinsurance program also helps the three state plan carriers meet their premium reduction targets.

Lombardo's administration has described the reinsurance program, which goes into effect in 2026, as a way to mitigate threats from the public option and make it more sustainable for insurers.

Though a lawsuit challenging Nevada's public health insurance option was filed in July, state officials did not respond to questions about it, saying they could not comment on pending litigation. A review of court records indicates that no significant changes have taken place since the lawsuit was filed.

Lombardo and Cannizzaro did not respond to emailed questions from The Nevada Independent.

What are the savings projections from the public option plans and the reinsurance program?

By the end of 2029, state officials estimate that the reinsurance program and public option will bring between $290 million and $322 million in new federal savings to Nevada.

Under the agreement approved by the federal government, a large portion of these funds will be used to implement a reinsurance program, with additional funds in future years being spent on a loan retention program for health care providers and a quality incentive program for carriers and provider networks.

The reinsurance program will begin in 2026, with payments to insurers anticipated early to mid-year of 2027. The program was approved by the federal government for a five-year period.

How can buyers choose the right insurance?

Medicaid, Nevada Health Link and the state plans are under one umbrella — the Nevada Health Authority — which helps streamline and better serve Nevadans by creating a front door approach said Stacie Weeks, the director of the Nevada Health Authority.

If a Nevadan applies for a plan through Nevada Health Link but actually qualifies for Medicaid, Weeks said the agency can help them get enrolled in Medicaid and vice versa.

Account transfer processes are improving because the different programs are under one umbrella.

"That means we can better communicate with these populations and make it easier for them to stay insured, even if their eligibility changes," she said.

— This story is used with permission of The Nevada Independent. Go here for updates to this and other Nevada Independent stories.

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