News Summary
Blue Cross & Blue Shield of Rhode Island is embroiled in a lawsuit regarding coverage for therapy services, while also announcing the termination of its Medicare Advantage plan for retirees. The company cites rising healthcare costs as a significant factor in its decision to cut the plan, which affects 275 retirees. Additionally, Blue Cross faces ongoing financial strain, with a projected loss of $115 million by 2024, prompting layoffs and cost-cutting measures.
Rhode Island – Blue Cross & Blue Shield of Rhode Island is currently facing legal challenges as a family has filed a lawsuit demanding nearly $50,000. The suit stems from a child’s three-month stay at Aspiro Wilderness Adventure Therapy in Utah, with the family asserting that their Blue Cross health plan should cover “intermediate care services,” which they believe applies to the therapy received. U.S. District Judge Mary S. McElroy has indicated that the plan’s coverage could include such care, yet Blue Cross contends that the therapy center does not meet the outlined requirements for intermediate care services under their policy.
In a separate financial move, Blue Cross & Blue Shield of Rhode Island has announced the termination of its Medicare Advantage group plan, which currently serves 275 retirees and their spouses. This change is slated to take effect on January 1, 2026, as part of a broader strategy to mitigate financial losses. It is projected that this decision will save the company approximately $125,000 annually while concurrently addressing a substantial liability of $6 million.
The retirees affected by this decision had qualified for the Medicare Advantage plan under specific age and service criteria. Previously, they had received premium subsidies based on their duration of involvement with the company. However, the plan had ceased to be available to retirees who left the company after April 1, 2013. Following the termination, the affected retirees will have the option to transition to a new Medicare Advantage individual plan with monthly premiums varying from $0 to $35.
Blue Cross cited the soaring costs of medical and prescription drugs as a significant factor behind the cost-cutting measures, and they forecast an estimated loss of $115 million by 2024. Recently, the company also laid off around 30 employees, accounting for nearly 3% of its workforce, due to a nearly 20% rise in health care costs over the past 18 months. The organization reported a 14% hike in pharmacy costs for its members and indicated that outpatient care expenses surged by more than 10% compared to the previous year.
As of June 2025, Blue Cross recorded a net loss of roughly $3.6 million, which, while still a deficit, represents an improvement from the nearly $15.6 million loss experienced during the same timeframe last year. Despite these losses, the company reported a surplus fund of over $329 million as of June 30, though this amount has decreased from approximately $435 million noted during the first half of 2024.
The combination of ongoing financial strain, the litigation concerning health plan coverage, and the decision to cut the Medicare Advantage group plan indicates significant challenges ahead for Blue Cross & Blue Shield of Rhode Island. Stakeholders, including retirees and their families, are likely to remain watchful of the developments relating to both the lawsuit and the upcoming changes to their Medicare coverage options.
Deeper Dive: News & Info About This Topic
- WPRI: Blue Cross & Blue Shield of Rhode Island to End Health Plan for Retirees
- Wikipedia: Blue Cross Blue Shield
- Boston Globe: Blue Cross RI Health Insurance for Retirees
- Google Search: Blue Cross Rhode Island
- Bloomberg Law: Blue Cross Rhode Island Lawsuit
- Google Scholar: Blue Cross Rhode Island Lawsuit
- Turn to 10: BCBSRI Day of Service
- Encyclopedia Britannica: Health Insurance
- Providence Journal: Rhode Island Hospital Charges
- Google News: Rhode Island Healthcare
Author: STAFF HERE PROVIDENCE WRITER
The PROVIDENCE STAFF WRITER represents the experienced team at HEREProvidence.com, your go-to source for actionable local news and information in Providence, Providence County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as WaterFire, Rhode Island International Film Festival, and Rhode Island Comic Con. Our coverage extends to key organizations like the Greater Providence Chamber of Commerce and Providence Warwick Convention & Visitors Bureau, plus leading businesses in finance and manufacturing that power the local economy such as Citizens Financial Group and Textron. As part of the broader HERE network, we provide comprehensive, credible insights into Rhode Island's dynamic landscape.
