LOS ANGELES – Already fighting a high-profile lawsuit in Los Angeles
Superior Court and several pending government investigations from
Sacramento to Washington, Anthem Blue Cross was hit Monday with a new
potential class action on behalf of policyholders who claim the insurer
unfairly pushed them into plans with fewer benefits.

The company used controversial rate hikes, as high as 39 percent, to
force older and sicker customers into high-deductible plans with fewer
benefits so it could save money, Santa Monica-based Consumer Watchdog
alleged in the complaint.

The lawsuit seeks to end that tactic of "closing" an insurance product
and raising rates to members while offering them cheaper plans, which
plaintiffs say is known in the industry as the "death spiral."

An Anthem representative declined to comment.

Anthem, the state’s largest for-profit insurer, raised the ire of
consumer advocates, lawmakers, as well as state and federal regulators
when it began sending letters warning of rate hikes to the 800,000
Californians who buy individual policies rather than group insurance.

In testimony to Congress and California lawmakers last week, Anthem
executives defended the cuts as legal and necessary because the
individual insurance market loses the company, and its parent
WellPoint, Inc., money.

Lawyers from Whatley, Drake & Kallas, the Consumer Law Group, and the Stuart Law firm are also handling the case.

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