Maine Democrats on Tuesday abandoned a proposal to impose price caps on hospital services, yielding to pushback from hospital officials who said the bill would have been “catastrophic” to health care in the state.

In an attempt to rein in costs for patients, the bill sponsored by state Rep. Drew Gattine, D-Westbrook, would have required hospitals to cap prices for hospital services at 200% of Medicare rates.

Gattine submitted an amendment to L.D. 2196 on Tuesday that eliminated the price caps, the legislation’s central provision. It retained more modest reforms that limit price increases for individual insurance plans, small group plans and the state employee health plan. About 150,000 people have health insurance in those categories, according to the Office of Affordable Health Care.

During Tuesday’s health and human services committee hearing, Gattine conceded that there were strong objections to the hospital price caps.

“This is not as big of a step as the original bill,” Gattine said of the amended legislation. “But it’s a step that is intended to be impactful.”

Rep. Sam Zager, D-Portland, said the amended bill is much narrower, but that the “status quo is not sustainable.”

State Rep. Michele Meyer, D-Eliot, a committee co-chair, said “Maine families are being squeezed” by high health care costs.

“This is a small step in the right direction for Maine people, but I believe it’s the right step,” Meyer said.

The committee voted 6-5 in favor of the amended bill, which will be considered on the House and Senate floors. Republicans objected, in part, because they said they wanted to hear from hospital officials about the impact of the amended bill on hospital budgets.

Hospital officials, during a public hearing in front of the committee on March 5, said the original bill would result in shuttering services, such as the neonatal intensive care unit at MaineHealth’s Maine Medical Center in Portland, and closing hospitals.

The original bill would have extracted $1 billion in revenue from hospitals during a time when Maine’s hospitals are struggling financially, executives said.

Hospitals routinely charge much higher than Medicare rates for private insurance because Medicare doesn’t cover the cost of the services.

But Gattine and some health policy groups supported the price caps, arguing that cutting costs would result in lower premiums for private insurance plans.

“Maine families have been hit with a wave of bad news: skyrocketing health insurance costs, an explosion in medical debt, rising premiums,” Gattine said at the March 5 hearing. He said the “status quo is not sustainable.”

Hospitals have cited financial issues as the reason for service cutbacks in recent years, including Northern Light Health closing Inland Hospital in Waterville last year, MaineGeneral Health shuttering the Edmund N. Ervin Pediatric Center last year, and the closures of maternity wards across the state.