ATLANTA – A hospital tax that is a major funding source for Medicaid has been renewed, but some supporters went along reluctantly.

“I’m a ‘yes’ if we do this for one more year,” Rep. Scot Turner, R-Holly Springs, said on the floor of the Georgia House of Representatives last week.

The hospital provider fee, also known as the bed tax, was started in 2010 during what Turner described as “very dire times.” He said it came with a promise that the tax would one day be repealed. He urged his colleagues to work toward that goal.

The tax on hospital profits is a major source of funding for the insurance program for the poor, generating about $311 million. That money is matched with another $600 million from the federal government.

The tax is a critical funding source for the state’s fragile rural hospitals, which get back from the program far more than they pay in taxes.

The House voted to renew the tax for another three years Friday, about a week after the Senate first approved it. It now goes onto Gov. Nathan Deal, who praised lawmakers for quickly acting on the bill.

Rep. Sam Watson, R-Moultrie, who chairs the rural caucus, said rural lawmakers will fight any efforts to end the tax unless someone puts forward a plan to replace that $900 million. 

“We don’t have any other options,” he said.