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Consumer Watchdog is litigating a class action lawsuit on behalf of hundreds of thousands of California consumers against health insurer Blue Shield for forcing patients into lower-benefit and higher-deductible health coverage in violation of state law.

The lawsuit seeks to stop Blue Shield from shoving its policyholders into what is known as a “Death Spiral”–the industry term for what happens when a health insurer “closes” certain insurance policies to new applicants. The result is a vicious cycle of exodus by healthier members and spiraling rate increases, causing consumers with pre-existing health
conditions trapped in the closed plans to transfer to bare-bones coverage providing skimpier benefits or go without coverage altogether.

Recently, the California Department of Insurance deemed rate increases affecting consumers enrolled in the Death Spiral policies to be "unreasonable."

  • Read the San Francisco Chronicle coverage of Blue Shield's "unreasonable" rate increase.
  • Read the press release announcing the lawsuit.
  • Watch Fox 11's coverage of the lawsuit.
  • Download the lawsuit filed in San Francisco Superior Court.
  • Download Consumer Watchdog's brief opposing Blue Shield's attempt to deny consumers their day in court.