Feds approve Nevada public option health insurance plans

In becoming the third state to offer publicly-available health care plans, officials say residents can soon expect lower premiums and improved quality of health care throughout the Silver State. 

By Dana Gentry, Nevada Current

Public option health insurance plans, offered at lower costs than the plans available through the Silver State Health Insurance Exchange, will be available to Nevadans seeking coverage for 2026, Senate Majority Leader Nicole Cannizzaro announced Monday.

The federal government approved Nevada’s waiver to provide public option health plans, with premiums at least 15% lower than plans from the state exchange during the next five years.

“Starting next year, Nevada’s new public option plans will increase affordability in the individual health insurance market, bring record federal health care investments to the state, and increase the number of covered Nevadans,” Cannizzaro said in a news release. The senate majority leader sponsored legislation in 2021 allowing the state to pursue the federal waiver.

Nevada will be the third state to enroll individuals in a state-offered public option, following Washington and Colorado.

Health insurance enrollment, as a result of the public option, is projected to increase by 600 in 2026, 1,800 in 2027 as well as 2028, 1,900 in 2029, and 2,000 in 2030, according to the state’s waiver application.

The federal approval, Cannizzaro said, will “allow Nevada to recoup an estimated $300 million to $500 million in federal funds that will be directly spent on lowering premiums and improving the quality of health care in Nevada.”

The waiver is not projected to increase the federal deficit because it projects lower individual market premiums, “and thus a net decrease in federal spending on premium tax credits” in 2026, and market-wide premium reductions during the five-year waiver period, the federal government wrote in its approval of the waiver.

The public option plans, known as Battle Born State Plans (BBSPs), will be available to individuals who purchase their own insurance. The new plans must be available at Nevada Health Link no later than Jan. 1, 2026.

The state “changed the name of the program on their website because they didn’t want to admit they were implementing a ‘public option,’ but the plans that will become available next year will be exactly as envisioned by the law when passed in 2021, including hitting the law’s required premium reduction targets,” said Cannizzaro’s spokesman, Greg Lademann via email.

The BBSPs, according to the Department of Health and Human Services’ website, must, “mirror other health plans sold on Nevada Health Link,” with the same benefits and cost-sharing requirements. Unlike existing plans, they must satisfy premium reduction targets.

“Under the waiver, the State has projected average net premium rates in the individual market will be lower than without the waiver by 0.2% in plan year (PY) 2026, 3.1% in PY 2027, 4.1% in PY 2028, 5.7% in PY 2029, and 5.9% in PY 2030 due to the State’s reinsurance program and BBSP premium reduction targets,” says the letter from federal authorities.

The state projects net federal savings of $31 million in 2026, and $322 million in savings during the five-year period “due to premium reductions for BBSPs and the implementation of a reinsurance program,” says the waiver approval letter. The savings will be passed through to the state to be used to implement the plan.

Nevada’s public option “will ultimately control health care costs by reducing premiums in the health insurance marketplace and generating federal savings on premium tax credits,” the state’s waiver request said.

A market stabilization program will help offset the risks borne by the insurance markets that participate in the plan. It includes a reinsurance program for carriers in the individual market. A second component, given sufficient funding, according to the state’s application, provides quality incentive payments “to reward high-performing insurers that offer BBSPs and meet certain quality metrics or indicators tied to state priorities for the market.”  And third, if there is sufficient funding to fully finance a reinsurance and quality incentive program, the state intends to provide incentives to health professionals who are willing to live and work for four years in an area with a shortage.

Gov. Joe Lombardo did not respond to requests for comment on what portion of the federal funding would be used for market stabilization efforts. Lombardo called the public option “bullshit” on the campaign trail, and called for its repeal during his 2023 State of the State Address.

“The Lombardo administration is choosing to use some of the federal money for reinsurance (or ‘market stabilization’), which would not have been our first choice for how to use it, but should also help bring down costs in the overall individual market by assisting insurers with the cost of covering people with some of the most expensive claims,” Lademann said via email. “At the end of the day, the state is using its purchasing power to help drive down the cost to consumers, which is exactly what we always wanted.”