Feeling pressure from their local hospitals, House Democrats voted this week to repeal the so called tax-and-match program designed to draw down millions in federal Medicaid dollars.

Admitting it was a purely political move, Rep. Hannah Pingree, D-North Haven, the co-chair of Health and Human Services, made a motion on the House floor Monday to go against her own committee’s majority recommendation to keep the tax on the books. With Republicans already poised to vote against the tax, the motion passed in the House without debate.

In all, there were three bills dealing with the tax – one to eliminate it all together, one to reduce it, and one to exempt private non-medical institutions from it. All three were defeated narrowly last week in the Senate, which now will have to deal with the House’s vote.

The tax brings more than $70 million annually into the general fund because it attracts a federal Medicaid match of close to $2 for every $1 spent. Even if the repeal somehow managed to survive in the Senate, there is no money to fund the tax loss in the upcoming budget.

In a caucus before the House vote, Democratic representatives said their strategy was to force the Appropriations Committee to make the decision on the tax rather than be recorded as voting against their local hospitals. According to the Maine Hospital Association, 30 of the state’s 39 hospitals lose money under the tax even though they were promised reimbursement.

“Our committee was just trying to be fiscally responsible” said Pingree, in voting not to recommend passage of the tax’s repeal, which was proposed by Republicans. Voting to cut the tax was a purely political move, she said, because House members would be on the record as having voted for their hospitals knowing the bills ultimately will be killed.

House Speaker John Richardson, D-Brunswick, said while it might sound a little “disingenuous” to send the decision down to the Appropriations Committee, “it was disingenuous for the Republicans” to propose the tax elimination to begin with when they knew there was no way to make up the revenue it brings in.

Under tax-and-match, hospitals pay a 2.2 percent provider tax. That tax is then added onto the cost of doing business under Medicaid and triggers a 2-to-1 federal match. Hospitals can be reimbursed, however, only based on the number of Medicaid patients they serve. Consequently, hospitals with a low percentage of Medicaid patients lose money, from several hundred thousand dollars to up to $1 million or more a year.

The tax is also applied to nursing homes at a 6 percent rate, but the payback is better because most nursing home residents are on Medicaid. A similar service provider tax of 5 percent has been added to private non-medical institutions. In Gov. John Baldacci’s proposed Part 2 budget, services for the mentally retarded also would be taxed as service providers.