"In order to keep pace with rising costs, your rates will be adjusted effective March 1, 2011," reads the letter.
Blue Shield of Calif. told Michael his rates were skyrocketing nearly 60 percent, from $271 each month to $431. He'll pay nearly $2,000 more each year.
"I was pissed, I was outraged, I was like 59 percent you've got to be kidding me!" exclaimed Fraser.
He's not alone. Approximately 193,000 Blue Shield policyholders in Calif. will see rate hikes averaging 30 to 35 percent. One in four customers will see a jump of more than 50 percent. So a family paying $600 each month could see their monthly premium hit nearly $1,000.
The company says customers need to pay more because of rising hospital costs, doctor's bills and prescription drug prices.
In a statement Blue Shield says the increases "have almost nothing to do with the federal health reform law."
Here's another problem for the insurance companies: When the economy is bad a lot of healthy people drop their coverage to save money. So who's left? The less healthy folks who cost more and that drives rates up even further.
California's insurance commissioner wants Blue Shield to delay the hike for 60 days, but has no real authority to stop it.
"I have that authority for car insurance, and homeowners insurance and casualty insurance but I don't have it for health insurance," said Calif. insurance commissioner Dave Jones.
So consumer watchdogs want more regulation.
"We need a tough new law, a big stick to just be able to give the government the power to say no when insurance companies try to take people hostage the way they're doing now," said Jamie Court president of Consumer Watchdog.
Michael Fraser says he may be forced to drop his insurance.
"That's really scary," said Fraser. "I'm 53, I don't know if I want to go without health care at 53."
So he will also start saving, hoping he can still afford it.