Consumer Group Sues Rate-Hiking Calif. Insurer

Consumer Watchdog and other plaintiffs are suing Anthem Blue Cross, the California insurer that recently told policyholder it would hike premiums by 39 percent, the Los Angeles Times reports. The suit, which could gain class-action status, alleges that Anthem has violated "state law by closing certain policies to new members while illegally offering remaining customers alternative plans with fewer benefits at higher rates" (Helfand, 3/2).

One plaintiff, a policyholder, explained, "We could either stay with our old coverage or switch to a new policy with much lower benefits. What Blue Cross did not tell us was that staying with our better policy would mean a 39 percent rate increase," Reuters reports. Reuters says the company did not immediately comment, but has in the past said its premium increase "reflect soaring medical costs" (Gorman, 3/1).

"The lawsuit comes on the heels of government scrutiny of a steep Anthem Blue Cross rate hike for roughly 700,000 individual policyholders in California," the Associated Press reports. "The hikes average 25 percent — some premiums will rise as much as 39 percent — but implementation of the hike has been delayed until May 1 while a state regulator investigates" (Mohajer, 3/1).

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