Public Health Option Plans Face Challenges Amidst ACA Subsidy Changes

More than 10,000 people have enrolled in Nevada’s new public-option health plans, known as “Battle Born State Plans,” which debuted in the fall of 2025. This enrollment figure is less than a third of the initial projections made by state officials. Nevada joins Colorado and Washington state as the third state to launch a public option, aiming to offer lower-cost plans and expand health care access.

The Promise and Challenges of Public Options

The concept of a public option gained traction in the late 2000s during discussions about healthcare reform. While initially considered for a government-funded and run plan, the programs in Washington, Colorado, and Nevada are public-private partnerships designed to compete with private insurance carriers. States have increasingly considered public options to address affordability and reduce the number of uninsured individuals.

However, early implementations in Washington and Colorado have encountered obstacles. These include limited participation from healthcare providers, such as clinicians and hospitals, and difficulties for insurers in meeting targeted rate reductions or achieving lower premiums compared to other marketplace plans.

Nevada’s Approach and Obstacles

Nevada law mandates that the “Battle Born State Plans” lower premium costs by 15% over four years compared to a benchmark silver plan. However, the expiration of enhanced Affordable Care Act (ACA) tax credits may diminish the impact of these reductions. Keith Mueller, director of the Rural Policy Research Institute, noted that a 15% reduction “is not a lot of money” given rising premium costs.

Three of the eight insurers on the Nevada Health Link exchange offered the state plans during the open enrollment period. To meet the lower premium requirements, insurance companies are cutting broker fees and commissions, which has drawn opposition from insurance brokers. Nevada marketplace officials have responded by proposing a flat-fee reimbursement for brokers.

The public option in Nevada has also faced legal challenges. In 2024, a state judge dismissed a lawsuit brought by a state senator and a taxpayer advocacy group, which argued the law was unconstitutional. The case is currently under appeal to the state Supreme Court.

Federal Changes Complicate the Landscape

Nevada consistently ranks among the states with the highest rates of uninsured individuals. In 2025, nearly 95,000 residents received enhanced ACA tax credits, averaging $465 in monthly savings, according to KFF, a health information nonprofit. However, these enhanced tax credits expired at the end of 2025, and their renewal appears unlikely.

Nationwide, ACA enrollment has decreased by more than 1 million people so far in 2026, down from a record high of 24 million in 2025. The Congressional Budget Office estimates that approximately 4 million people will lose coverage due to the expiration of the tax credits, with an additional 3 million projected to lose coverage due to other policy changes.

Changes implemented through the One Big Beautiful Bill Act, signed into law in 2025, will further complicate coverage, according to Justin Giovannelli, an associate research professor at the Center on Health Insurance Reforms at Georgetown University. These changes include increased documentation requirements, a shortened enrollment window, and the elimination of automatic reenrollment.

In Nevada, these federal changes are projected to result in approximately 100,000 people losing health coverage.

Enrollment Numbers and Future Outlook

State officials initially projected 35,000 enrollments in the public option plans. As of mid-January 2026, 10,762 people had enrolled in a Battle Born State Plan out of a total of 104,000 marketplace enrollees. Katie Charleson, communications officer for Nevada Health Link, attributed the lower-than-expected enrollment to increased premium costs for consumers and emphasized that the public option provides more choices for those facing higher costs.

KFF data indicates that enhanced subsidies saved enrollees an average of $705 annually in 2024, and would save an estimated $1,016 in 2026 if continued. Without these subsidies, ACA marketplace enrollees could spot their premiums more than double.

Lessons from Washington and Colorado

Washington and Colorado are not planning changes to their public option programs in response to the expired tax credits. Other states that considered public options have paused their efforts, citing funding concerns (Minnesota) or other challenges (Maine and New Mexico).

Washington state initially experienced low enrollment in its Cascade Select plans, but enrollment increased after requiring hospitals to contract with at least one public-option plan. In 2024, 94,000 customers enrolled, representing 30% of all marketplace enrollees. The public-option plans were the lowest-premium silver plans in 31 of Washington’s 39 counties.

A 2025 study found that Colorado’s public option, the Colorado Option, made coverage more affordable for those receiving subsidies but more expensive for those who did not. Enrollment in the Colorado Option has increased annually, with 47% of customers purchasing a public-option plan in 2025.

Giovannelli emphasized that states continue to seek ways to improve affordability and access, despite federal challenges. “States are reacting and trying to continue to do right by their residents,” he said, “but you can’t plug all those gaps.”