On January 3, a lawsuit was filed by Senator Robin Titus (R) and the Nevada Taxpayers Association challenging the constitutionality of the Public Option – SB420 from the 2021 Legislative Session (codified now as NRS 695K.010 – NRS 695K.300). This bill, to implement a state-managed public health insurance option by 2026, has generated a great deal of discussion and consternation since its passing. And this lawsuit came only a few days after state officials filed a waiver seeking federal funding.
Governor Lombardo’s administration rebranded the Public Option at the end of 2023 to be known as the Market Stabilization Program through establishing a reinsurance program.
The lawsuit says that the law violates the Nevada Constitution and identifies three provisions:
- There must be a two-thirds majority in each legislative house to pass any bill that “creates, generates, or increases any public revenue in any form, including but not limited to taxes, fees, assessments and rates, or changes in the computation basis for taxes, fees, assessments and rates.” According to the lawsuit, this conflicts with Article IV, Section 18(2) as the bill appears to generate revenue but was not passed with a two-thirds vote in the Assembly or the Senate.
- SB420 further gives the State Treasurer and the DHHS Director nearly unlimited discretion to use unspecified amounts of funds from the state treasury for unspecified purposes that the legislature did not approve when passing SB420. This allegedly violates Article IV, Section 19, which states that no money shall be drawn from the treasury but in consequence of appropriations made by law.
- SB420 allegedly impermissibly delegates lawmaking authority to executive branch agency directors without providing any stable standard governing the manner and circumstances under which that authority is exercised. This allegedly violates the separation-of-powers principle in Article III, Section 1.
