WELLPOINT INC'S California subsidiary Anthem Blue Cross is in the news for initiating huge rate hikes in its health coverage plans, which has compelled the policyholders of Anthem Blue Cross to file a lawsuit against the company.

The objective of the rate hike was apparently to impose a lower benefit health coverage fore the patients, which actually violates state laws. Anthe, Blue cross is discontinuing certain insurance plans, which is against the California laws. California law clearly states that once a health insurer closes a specific health policy, it requires offering another policy which has comparable coverage, or reduce the premium increases on the closed policy.

Mary Feller, one of the plaintiffs who filed a lawsuit said “Blue Cross has a gun to our heads. My husband and I got a letter in the mail from Blue Cross telling us that they were closing our policy. "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 per cent rate increase."