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Sen. John Kuehn

Sen. John Kuehn

District 38

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Letter to the District 12

March 25th, 2016

The start of the next week of the Nebraska Legislature will begin with debate over LB 1032, the Transitional Health Insurance Program Act.  Although it has been referred to by several different names, it is the fourth attempt at expansion of the Medicaid program in Nebraska. Under the Affordable Care Act, commonly referred to as “Obamacare”, states receive additional federal dollars at a match rate higher than existing Medicaid programs to expand the number of people eligible for government health coverage. Previous unsuccessful efforts have attempted to expand traditional medicaid coverage.  The current proposal, LB 1032, uses federal and state dollars to purchase private health insurance for working adults who meet income limits.

I unquestionably support expanding access to healthcare for Nebraskans. Access issues are complicated, and include the availability of providers, facilities and service availability, the regulatory burden on health care, and the cost of providing primary, emergency, and advanced care services. In rural communities, having enough health care professionals and keeping cost of providing service reasonable are the greatest challenges facing our clinics and hospitals. Providing private health insurance to working adults does not solve the access and cost issues facing rural health care.

While the short term and long term policy discussion around the expansion of public health insurance continues, the Legislature will be addressing a very specific proposal in LB 1032. The initial cost of LB 1032 as proposed would have cost over $1 billion over the course of the next decade. In an attempt to reduce the impact to the state General Fund, bill proponents have reworked it several times. The proposal to be debated on the floor will fund the state’s share of the expanded program using dollars from the Health Care Cash Fund.

Although the program is advertised as “drawing down federal money”, it still has a cost share to the Nebraska budget. The current fiscal note projects a cost of just shy of $10 million the first year, almost $54 million the second year, and $87.5 million the third year, when the program expires. If extended, fourth year state costs expand to $111 million. Based on projections, that is a $151 million state cost during the 3 year life of the program. While proposed as a three year “pilot program”, previous litigation has made eliminating a government entitlement program nearly impossible.  

My strongest objection to LB 1032 in its current form is the use of the Health Care Cash Fund to meet the state share of the cost. The Health Care Cash Fund is a cash fund that receives the bulk of its revenue from the Tobacco Settlement Fund. Nebraska exemplified exceptional stewardship of the funds it received from the multi-state settlement with tobacco companies to address the increased health care costs borne by the state due to smoking. Rather than use the settlement on one-time expenditures, the state established a fund that would last indefinitely to provide sustainable funding streams for Tobacco Settlement Enforcement, Tobacco Prevention and Control, and a host of other important health care programs. These include the Poison Control Center, Minority Health Aid, County Public Health Aid, Developmental Disability Aid, Respite Care, the Mental Health/Substance Abuse Regions, and provider rate increases for Behavioral Health.  The long term viability of the Health Care Cash Fund is vital to the sustainability of all of these critical programs.

Tapping the Health Care Cash Fund to purchase private insurance for working adults as proposed under LB 1032 would jeopardize the long-term viability of the fund and most certainly lead to a loss of the funding streams for the above mentioned programs. I do not feel it is fiscally responsible to put at risk a successful, prudent, and wise decision by previous legislators in establishing the Health Care Cash Fund. The cost is much more than mere dollars and cents, it is the potential existence of proven, successful health care programs.  

As always, please do not hesitate to contact my office with questions or to express your position on legislation at 402-471-2732 or email at For daily updates during the session, please follow me on Twitter at @JohnKuehnDVM.

Senator John Kuehn, District 38


Sen. John Kuehn

District 38
Room #2000
P.O. Box 94604
Lincoln, NE 68509
Phone: (402) 471-2732
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