SMITHFIELD – Neighborhood Health Plan of Rhode Island posted a net loss of $1.7 million in 2017, and President and CEO Peter M. Marino said Gov. Gina M. Raimondo’s fiscal 2019 budget proposal that cuts Medicaid funding by $166 million will add to the nonprofit’s challenges.
Revenue grew 21.7 percent from the prior year to $1.4 billion, but hospital and medical expenses rose 25.6 percent to $1.2 billion. The company’s net underwriting gain, roughly equivalent to an insurer’s operating income, amouted to $317,266, a significant drop from the previous year’s $19.5 million.
NHPRI’s net change in capital and surplus fell $2.4 million, pulling down the insurer’s reserves to $100.3 million at the end of the year from $102.7 at the beginning of 2017, but Marino noted the fund was still healthy.
“Our reserves remain well above regulatory requirements,” Marino said. The National Association of Insurance Commissioners requires Neighborhood to keep reserves at $95.6 million, he said.
Given the nonprofit’s dependence on Medicaid revenue, which made up 96 percent of Neighborhood’s income during the year, Marino said Raimondo’s proposed fiscal 2019 budget, which cuts $166 million from Medicaid, is cause for worry.
“As one of the top Medicaid health plans in the nation, our mission is to deliver quality care to some of Rhode Island’s most vulnerable folks. As a nonprofit and steward of taxpayer dollars, we operate on very slim margins, and recent state rate reductions had a significant negative impact on Neighborhood. We are very concerned about the governor’s fiscal 2019 budget proposal, because it would also have far-reaching negative impacts on Medicaid recipients and Neighborhood.
“The state enacted several rate reductions that adversely impacted our 2017 financial performance as well as that of key providers in the state,” Marino said.
Rob Borkowski is a PBN staff writer.
