Neighborhood Health Plan of Rhode Island posted a small loss in 2017, and the insurer’s CEO says he is concerned about proposed cuts to Medicaid in the state budget.
In a regulatory filing, Neighborhood said it suffered a net loss of $1.7 million for the year, down from a profit of $19.7 million in 2016. Revenue jumped nearly 22% to nearly $1.4 billion. Medical expenses totaled $1.2 billion, while administrative expenses totaled $103 million.
The insurer’s net reserves – a key measure of its solvency – dipped from $103 million to $100 million during the year. Another key measure, its insurance underwriting, barely broke even at $317,000, following a profit of nearly $20 million in 2016.
In a statement, Neighborhood President and CEO Peter Marino noted that the company’s reserves “remain well above regulatory requirements” despite the red ink.
“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,” he said.
Marino, who was the Rhode Island Senate’s top fiscal adviser before taking the helm at Neighborhood, also said the company is “very concerned” about Medicaid spending cuts in Democratic Gov. Gina Raimondo’s proposed budget, arguing the reduction would “have far reaching negative impacts on Medicaid recipients and Neighborhood.”
The vast majority of Neighborhood’s revenue – 96% of the total – came from Medicaid in 2017, according to the filing.
Neighborhood was the the only one of Rhode Island’s three major health insurers to lose money last year. Blue Cross and Blue Shield of Rhode Island, the state’s biggest insurer, reported an annual profit of $22 million, while UnitedHealthcare of New England reported a profit of $24 million.