OPINION: Public option bodes ill for Nevada's taxpayers and its Constitution

By touting a controversial bill (SB420) that created a state-controlled public option health insurance system in 2021, a recent op-ed article overlooks the real harms to consumers, taxpayers and Nevada's Constitution.

Whether measured by reducing uninsured rates or premiums, the other two states with taxpayer-backed public options — Colorado and Washington — have delivered poor results for consumers. For example, despite claims by proponents of the Colorado Option that it would make coverage more affordable, premiums for individual plans in the state rose by 10 percent in 2024 on top of a similar increase the year prior. An analysis published in the Journal of the American Medical Association Forum last month concluded that these states "offer cautionary tales" to others "entertaining public option proposals."

In rushing their own public option through the Legislature, Nevada lawmakers refused to heed the warnings of health care leaders, practitioners and other stakeholders who cautioned that it could come with unaffordable costs and negatively impact Nevadans' access to care. Supporters of SB420 may have dismissed such problems three years ago, but they can't easily do so now.

Taxpayers will suffer from SB420 because it violates the Nevada Constitution three times over. This is why the organization I lead, the National Taxpayers Union, recently joined with state Sen. Robin L. Titus, M.D. (R-Wellington) to file a lawsuit challenging SB420 in Nevada's First Judicial District Court.

First, since 1996 the Nevada Constitution has required a two-thirds majority in both the Assembly and the Senate to pass any bill that "creates, generates, or increases any public revenue in any form." SB420 will generate public revenue and it was not passed by the necessary two-thirds majority in either legislative house. To imply that this protection only applies to direct tax hikes is wrong. Nevada courts have never upheld such an argument, and Nevadans knew what they were voting for 30 years ago.

Second, SB420 contradicts the Constitution's appropriations clause by giving the state treasurer and executive agency officials unlimited discretion in deciding how to use an unspecified amount of funds for the vague purpose of increasing affordability.

Third, SB420 defies the separation-of-powers principle, which states that "no persons charged with the exercise of powers properly belonging to one of these departments shall exercise any functions appertaining to either of the others" by giving away the legislative branch's lawmaking authority to executive branch agency directors without sufficient direction.

The op-ed goes even further off target by implying that "federal dollars [being] transferred to the state" to fund SB420 are somehow without cost. Based on my organization's history of work and expertise around taxes, government spending and related issues, it is widely understood that borrowing this money from future generations in Nevada and across the country has real-world consequences, including higher interest rates and inflation.

Attempts to disparage the motives of the National Taxpayers Union and Sen. Titus for challenging SB420 in court also miss the mark. During its 55-year history, our organization and its members have stood up for constitutional taxpayer protections in numerous states, including in Nevada. Titus has decades of experience as a family physician in rural Nevada and opposed SB420 since its creation because of her concerns regarding how it could harm Nevadans' access to the affordable care they need.

Try as they might, supporters of SB420 can't spin away the facts about this untenable, unconstitutional proposal. Nevadans deserve better.

Pete Sepp is president of the National Taxpayers Union.

The Nevada Independent welcomes informed, cogent rebuttals to opinion pieces such as this. Send them to [email protected].