Industry group joins governor in dissing state public option, physicians’ group pushes back

In an ongoing battle to implement a public health care option in Nevada, an organization allied with the insurance and health care industries released a report Monday arguing the public option would exacerbate the state’s provider shortage and reduce access to care. 

An arm of Partnership for America’s Health Care Future (PAHCF), a group that advocates on behalf of some of the nation’s largest hospitals, pharmaceutical companies and insurers, commissioned the study. 

The report’s release prompted Nevadan physicians with the Committee to Protect Health Care, a national mobilization of doctors, health care professionals, and advocates, to criticize the PAHCF analysis because it used “flawed data to deliver skewed results” and the authors refused “to have the analysis be peer-reviewed.” 

PAHCF opposed the public option legislation when it was enacted in 2021, and have advocated against the public option and health industry reforms in other states and nationally.

Republican Gov. Joe Lombardo, who called the public option “bullshit” on the campaign trail, has rallied against its implementation, and called for its repeal during his State of the State Address.  

“Governor Lombardo shared his beliefs about this law during his campaign as well as his State of the State address. These findings confirm that he was right. Unfortunately, the Legislature refused to make any changes to this law, so Nevadans are now stuck with the threat that their state’s healthcare system will be harmed,” Lombardo’s Chief of Staff Ben Kieckhefer said in a statement Monday. 

Lombardo last month announced his plan to “transform” the public option in the state into a “Market Stabilization Program” by prioritizing federal funds made available through a state innovation waiver program under the Affordable Care Act to finance a reinsurance program for private companies operating in the individual market. Reinsurance for private companies “is a proven method of protecting consumers,” Lombardo said at the time.

Under the Lombardo administration’s recasting of the program, incentives would also be offered for “high-performing insurers” that offer public option plans.

“In an effort to mitigate these threats, the Governor has proposed a reinsurance program that will hopefully offset some of the damage done by the public option, but ideally, the Legislature will revisit this issue when they convene again in 2025,” Kieckhefer said Monday. 

Under legislation enacted in 2021, a state-managed public health insurance option is to be created by 2026 with the goal of reducing premium prices by 16% over 5 years. To reduce costs, the program would reimburse providers at a lower rate than private insurers do. 

The PAHCF report contends premium reductions required by the bill could not be fully realized in the state.

The hospital reimbursement reductions needed to achieve premium reductions targeted in the public option “are likely to put financial hardship on hospitals,” the PAHCF report said. 

Lowering premiums to meet the targets will also harm insurers, the report said, adding “If business cases existed to lower premiums to such competitive levels, we believe market forces would have already driven the premium reductions.”

The report’s assessment contrasts with a report prepared for the state Department of Health and Human Services in December 2022. That actuarial report found that the public option would have a “small negative impact on provider revenue” because the individuals who would benefit from the public option make up only about 3% to 4% of the state’s population and a small proportion of providers’ revenue. 

Insurance rates on the state-based health exchange have increased by 2.8% on average over the past year, while rated off the exchange increased by 5.9%, according to the Nevada Department of Insurance.

“Doctors and patients worked hard to help make the Nevada Public Option a reality, and now we’re calling on the health plans to stop obstructing access to affordable healthcare,”  Dr. Harpreet Tsui, an internist in Las Vegas and Nevada Lead for the Committee to Protect Health Care, said in a statement. “But with health care premiums continuing to climb, it’s now more important than ever that Nevadans have access to affordable, quality coverage that doesn’t break the bank,” Tsui said.