Apr 10, 2024

BCBSRI posts small gain despite $26M operating loss in 2023

PROVIDENCE, R.I. (April 10, 2024) — Blue Cross & Blue Shield of Rhode Island (BCBSRI) reported an operating loss of $26 million in 2023, reflecting a substantial surge in medical and pharmacy claims that resulted in costs growing by $195 million, or 10.5%, over the prior year.

Through administrative cost reductions and the positive performance of the plan’s investment portfolio, BCBSRI delivered a slightly better than break-even net gain of $602,000 on a margin of 0.1% of revenue for the calendar year ending Dec. 31.

“Here in Rhode Island, as well as nationally, health care costs are growing rapidly, driven by steep increases in utilization and expanding usage of high-cost pharmaceuticals,” said Martha L. Wofford, president and CEO of BCBSRI. “In the midst of these escalating cost pressures, BCBSRI sustained significant operating losses, but managed to break even financially. Even more importantly, we delivered the highest quality service to our members, grew our membership, and worked toward improving the affordability, accessibility, quality, and equity of healthcare in Rhode Island.”

Year-over-year claims increase by $195 million 

Monthly payments to healthcare providers for the care and treatment of members rose $16 million in 2023 to $152 million per month as healthcare costs grew to consume 89.3% of each premium dollar paid.

Annual claims expenses for hospital-administered drugs, medical and surgical services, imaging, and diagnostics grew by $85 million in 2023 from the previous year. Additionally, pharmaceutical claims grew by $75 million in 2023, led by a 1,300% increase in the commercial market’s use of some GLP-1 drugs prescribed for weight loss and diabetes. Concurrently, utilization of high-cost specialty medications for autoimmune diseases jumped 20% amid an expansion of approved conditions treated by these specialty drugs.

Membership retention and growth

BCBSRI’s medical enrollment grew by 2.3% in 2023 to now cover more than 431,000 members – approximately 10,000 more than year-end 2022. Additionally, Blue Cross dental experienced a 4.5% increase in enrolled members to reach a total of 159,000 covered individuals.

Additional information on BCBSRI’s 2023 financial performance as well as the progress achieved advancing our vision to improve the affordability, access, and equity of healthcare in Rhode Island will be available later in April through the 2023 Mission Report available on BCBSRI.com.