Posted on: Thursday, February 20, 2003

Insurer changes course, says it will cover terrorism claims

By Michael Rubinkam
Associated Press

PHILADELPHIA — On Jan. 1, Blue Cross of Northeastern Pennsylvania became one of the country's first health insurers to exclude coverage for acts of terrorism.

Yesterday, the company said it had made a big mistake.

President and chief executive Denise S. Cesare said the policy went into effect without her knowledge and would be reversed.

The new language said Blue Cross wouldn't pay for treatment of illnesses or injuries caused by "any act of war, declared or undeclared, or warlike operation."

Earlier yesterday, company spokesman Gerry Snyder said the new policy excluded terrorist acts.

Snyder said the company, which has about 590,000 customers, couldn't justify the increased financial risk of a terrorist attack.

But Cesare later said such a change would have required her approval or that of the board of directors. "What our plan has done is apparently run out ahead of itself, which I need to correct," she said.

Most health insurers have long refused coverage for injuries suffered in wartime. After Vietnam, many health insurers added an exclusion for "undeclared" wars.

But industry experts said they weren't aware of any other health insurance company refusing to cover terrorist acts, and many of the nation's largest insurers said yesterday they had no plans to change that stance.