AUGUSTA — With 40% of Mainers taking on medical debt in the last five years, a new bill at the State House seeks to restrict what hospitals can charge for services.

Rep. Drew Gattine (D-Westbrook) is sponsoring LD 2196, which he says will bring fairness and accountability to hospital fees.

“Our health care system is broken,” he said. “It doesn’t work for families, and it doesn’t work for employers. And a big part of the problem lies with the cost of hospital care.”

His bill proposes to require insurance companies to pay at least 110% of Medicare rates for primary care and behavioral health services. It also caps prices charged by large hospitals to no more than double the Medicare rate and proposes to limit growth each year. 

The bill is receiving considerable pushback from the state’s two largest health care systems — Maine Health and Northern Light Health. The hospitals say it will cost them more than $1 billion annually at a time when many of them are struggling.

They say it will put trauma care and advanced neonatal care services at risk and likely result in “thousands of layoffs.”

In response, Gattine said the bill exempts 17 critical access hospitals that are smaller and located in rural areas. He said larger hospital systems are welcome to work with state officials to find sustainable ways to bring down costs.

Sen. Henry Ingwersen (D-Arundel), a bill cosponsor, said the measure also seeks to tamp down on what he described as excessive prior authorization and help slow the growth of premiums. 

“This is ambitious legislation, but it is not radical,” he said.

He said Oregon and Washington state have implemented similar proposals.

Meg Garratt-Reed, executive director of the Office of Affordable Health Care, said it’s time for the state to play a more active role in regulating hospital costs.

“Doing nothing is not an option,” she said. “The current trajectory is not sustainable for Maine families, Maine businesses or Maine government.” 

The Legislature’s Health and Human Services Committee will consider the bill over the coming weeks.