Hospital fee (or is it a tax?) cruising through Senate

State senators on Monday twice voted overwhelmingly in favor of continuing to make hospitals pay toward a fund that helps to generate nearly $1 billion for health care in Georgia.

The legislation, Senate Bill 70, now heads to the Senate Rules Committee, the gateway to a Senate floor vote.

Those who spoke in favor of the bill noted that its key function is to act as seed money to draw down federal dollars to bolster the state's Medicaid health program for the poor, elderly and disabled. Sen. Michael Williams, R-Cumming, said it was expected to generate $311 million directly from the hospitals in one year, and that would be matched by about $600 million from the federal government to help plug a gap in Medicaid funding.

The tax, which is set to expire at the end of June, would be extended to 2020 if approved.

The measure – dubbed the "bed tax" by opponents and a "provider fee" by supporters – is said to be Gov. Nathan Deal's top health care priority this legislative session.

The smooth sailing is a remarkable turnaround from the tax’s early days. In 2010, Lt. Gov. Casey Cagle was widely seen to have lost much of his power in a coup staged by senators who were angry at how he forced it through the Senate.

On Monday, a Senate Finance Subcommittee approved the proposal unanimously. In the Senate Finance Committee later the same afternoon, it passed 10 to 1. The lone dissenter was Sen. Bill Heath, R-Bremen, who tends to take some of the most anti-tax positions among his anti-tax colleagues. When it came time to move for a vote on the bill there were so many seconds that the committee chair had to choose; he awarded the second to Renee Unterman, R-Buford, the chairwoman of the Health and Human Services Committee.

After the vote, Williams said he voted to approve the bill because it was needed to pay for health care for Georgians. He said even hospitals testified in favor of it, saying that “without it they would have to eliminate services.”

One of the most high-profile opponents of the payment has been Grover Norquist, a Washington-based anti-tax activist who has pressured many legislators into signing a pledge to never raise taxes for any reason. He has called the Georgia measure a “bed tax” and a step on the path to big government and dependence on taxes.

Monty Veazey, president of the Georgia Alliance of Community Hospitals, said in a statement that “the provider fee has made a critical difference in (the hospitals’) ability to stay open.”

Staff writer Kristina Torres contributed to this article.