"You feel deceived. I think you feel trapped," said Randy Freed. "You are stuck between a rock and a hard place."
The Freeds are part of a class-action lawsuit against Anthem Blue Cross. In September they received a letter saying their current plan was being closed to new customers. They could stay in the current plan or move to a different one.
"Our only other option was a policy with almost twice the deductible and with far fewer benefits," said Donna Freed.
They stayed with their existing plan and a few months later received another letter. This time around they were informed that their premiums were going up 33 percent.
"Anthem Blue Cross has been in the news a lot because Anthem Blue Cross is very good at gouging people," said Jerry Flanagan, a health advocate for Consumer Watchdog. "They are the market leader, not only the largest insurance carrier, but they are the best at charging people more for less coverage."
Consumer Watchdog says it's called a "death spiral" because rates inevitably increased until policyholders could no longer afford coverage. They say that's against California law.
"You have to at least offer comparable coverage in another policy, or for the people that are going to stay in the same policy, you have to spread their risk so they do not suffer these enormous rate increases," said attorney Pamela Pressley.
Just last week demonstrators protested outside Anthem headquarters in Woodland Hills.
During California Assembly hearings last week the company said with the bad economy it's losing younger, healthier customers and has to pass along rate increases to those who stay.
Eyewitness News contacted the company and a media spokesperson said they have heard about the lawsuit, but have not officially received it through their attorney's so they could not comment on the suit.
