Senator Kathy Campbell of Lincoln unveiled the proposal Wednesday.
Campbell's bill would expand Medicaid coverage as part of the federal health care law. She and several other lawmakers who support it say it would reduce long-term health care costs for the state, counties and hospitals while giving more residents access to preventative care.
The state estimates that expanded Medicaid would cover 117,000 to 159,000 residents by fiscal year 2016, when the program would be in full swing.
Senator Jeremy Nordquist of Omaha says Nebraskans are already paying for the uninsured through the so-called "silent tax'' of higher premiums. Nordquist says the bill would save Douglas and Lancaster counties millions of dollars for medical assistance programs, and Sarpy County an estimated $200,000.
Governor Dave Heineman opposes the bill. He says expanded Medicaid would drain money from other state priorities.