In The News
The effects of the rising costs of healthcare and health insurance loomed over a June 23 “Politics and Pancakes” event hosted by the Greater Newport Chamber of Commerce at Salve Regina University.
Rhode Island Rep. Marvin Abney and Sen. Louis DiPalma touched on the birthing center at Newport Hospital, recent federal cuts to Medicaid and Medicare and the challenges facing local employers in providing competitive benefits packages. The function featured many attendees from the commercial and nonprofit sector. Abney and DiPalma spoke for just under an hour and a half and took questions from the audience.
“We can’t take a 12 percent across-the-board insurance increase as an employer,” said Jennifer Fairbank, CEO of Visiting Nurse Home and Hospice. “And then, on the other side, take a cut as a provider in [Medicare] reimbursement. There’s no protection for businesses such as ours. That math doesn’t work. It’s unsustainable.”
Fairbank’s comments echo an issue at the center of the potential closure of the birthing center at Newport Hospital, which owner Brown University Health threatened to shutter last year for financial reasons. BUH leadership has pointed to Rhode Island’s low rate of reimbursement for treatment and services provided to Medicaid patients in comparison to neighboring states. The Rhode Island General Assembly authorized additional allocations for Medicaid reimbursements in 2025, though BUH leadership fought for more, and the problem was again a factor in this year’s recently approved $15.2 billion state budget.
This year’s budget includes $1.6 million in direct funding to Newport Hospital to keep the birthing center operational. The money is conditioned on the facility remaining open and services remaining unaffected. The funding is part of a larger $5 million annual package to support the center’s operations, with the remaining $3.4 million to come equally from BUH and fundraising efforts, per the budget.
“Employers are not going to fund insurance the same way that they have before,” said Erin Donovan Boyle, executive director at the chamber. “More people will become uninsured. We need to come up with a solution to stay or plateau costs for employers who are willing to invest in this system.”
This year’s state budget also includes an additional $15 million for uncompensated care to Rhode Island hospitals, bringing the total allocation for such reimbursement to $22 million for the year.
According to Donovan-Boyle, a recent walking tour and survey of local businesses by the chamber found that the cost of health insurance and the ability of small businesses to provide competitive benefits packages for new employees are the most significant concerns in the business community. Business leaders voiced that it will be harder to hire new employees, especially elderly and disabled individuals, as costs rise.
Abney and DiPalma lamented the roughly $1 trillion that will be cut for Medicare nationwide by recent federal legislation championed by President Donald Trump. They said federal funding is “drying up,” which exacerbates local issues, the impact of which will start to be significantly felt by middle and lower-class families next year.
“The big impact will be felt after midterm elections in November,” DiPalma said of the recently passed “Big Beautiful Bill.” “It’s smart to do that from a political perspective, but not smart from the perspective of how it’s going to affect the entire country.”
According to Abney and DiPalma, doctors are in short supply in Rhode Island due to the state’s high cost of living and its low Medicaid reimbursement rate.
Abney and DiPalma also found the recent failed negotiations between
BUH and United Health on Medicaid reimbursement rates troubling, saying that Massachusetts health providers were able to reach an agreement with the health insurance giant.
“Healthcare is kind of odd because when you don’t have it, you get sicker,” Abney said. “And the sicker you get, the more expensive healthcare becomes. It’s really hard to crack that nut and I don’t pretend to have all the answers.”
DiPalma said the state is conducting a rate review of Medicaid reimbursement payments to primary providers, the first time the rates have been reviewed in 30 years, as part of the recently passed state budget.