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CNN SUNDAY MORNING

Health Insurers Watching Us

Aired November 23, 2003 - 08:09   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

MARTIN SAVIDGE, CNN ANCHOR: In addition to big brother watching us, so are some health insurance companies. CNN's Jeff Flock explains.
(BEGIN VIDEOTAPE)

JEFF FLOCK, CNN CHICAGO BUREAU CHIEF (voice-over): Before Rhana Abbas' health insurance policy was approved by Blue Cross/Blue Shield, the company first checked to make sure she wasn't a terrorist.

UNIDENTIFIED FEMALE: It does make me upset. It angers me.

FLOCK: One of literally millions of new and existing health care subscribers nationwide who have now had their names checked by the Blues, Aetna, Cigna and other major carriers to make sure they're not on this 100-plus page government list of bad guys.

(on camera): You felt as though it was a requirement?

HELEN STOJIC, BLUE CROSS BLUE SHIELD: Absolutely.

FLOCK (voice-over): Blue Cross/Blue Shield's Helen Stojic says this executive order, 13224, signed by President Bush in 2001, which prohibits companies from doing business with terrorists, mandates the checks. For those on the list, "all property and interests in property are blocked."

(on camera): As I read the executive order, though, I don't see any specific reference to insurers.

STOJIC: Well, we've had advice from legal counsel, from our trade association, and actually from the Treasury Department that we are not exempt from it.

FLOCK (voice-over): Though the Treasury Department says nothing technically compels the checks, they admit to CNN that checking your database may be the only way to be sure of complying with the presidential order.

(on camera): Is this something medical insurers should be doing, in your view?

PROF. VIRGINIA REZMIERSKY, UNIV. OF MICHIGAN: Not at all.

FLOCK (voice-over): It's wrong, government mandated or not, says Professor Virginia Rezmiersky of the Gerald Ford School of Public Policy.

REZMIERSKY: You're guilty until proven innocent, which equates to not matching with the terrorist database.

IMAD HAMAD, AMERICAN ARAB ANTI-DISCRIMINATION COMMITTEE: Is now anything you're going to be part of subject to security clearance? Come on. Is this the paranoia of fear that we are going to live by?

FLOCK: When Blue Cross first ran their six million customer database in Michigan, thousands of names hit, including Rhana Abbas believes, hers. There are Abbases on the terrorist list.

(on camera): Now, you're not a terrorist?

UNIDENTIFIED FEMALE: No, I'm not.

FLOCK: Neither Rhana nor any of the others whose names initially hit turned out to be a terrorist. And their names were not reported to the government. Insurers also say they would not report any medical or personal information to the government. And they further say that they would be more than happy not to do the checks, but they fear criminal or civil penalties if they end the practice.

I'm Jeff Flock, CNN, in Deaborn, Michigan.

(END VIDEOTAPE)

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