Jefferson City, Mo. - If you've ever worked in an office or used a fax machine, you've probably seen the junk faxes:

            "Low-cost quality health insurance!"

            "Unbeatable rates on health coverage for your employees!"

More than a dozen companies who send these faxes and offer this service could face severe penalties and be shut down by the Missouri Department of Insurance. In documents filed today, the department has demanded that 13 companies and 12 individuals respond to charges that they have defrauded Missouri consumers.

The department has complaints from almost 150 consumers that paid these companies for services that were advertised as insurance, using phrases like "PPO," "Group Health Plan" and "dependent coverage."

"State law provides severe punishment for any company selling unauthorized health plans in Missouri," said John M. Huff, director of the Missouri Department of Insurance, Financial Institutions and Professional Registration (DIFP). "Many Missourians found out the hard way that these plans are not the comprehensive insurance they signed up for. Instead, some of them are left with massive unpaid medical bills."

Huff says one consumer faced an unpaid medical bill of more than $60,000 after getting treatment in Hannibal. Another southwest Missouri consumer paid nearly $2,000 for membership, then found out it didn't even cover flu shots. Others couldn't get refunds after canceling their coverage.

State law distinguishes between health insurance and discount medical plans. Insurers must be licensed, and discount medical plan providers must register. The companies targeted in today's action were neither licensed nor registered. They have been ordered to appear at a hearing March 10 to respond to the charges and could face cease and desist orders, a $250,000 fine or other penalties.

Consumers considering a discount medical plan should use caution:

• Understand that these plans are not insurance. They are similar to discount clubs that offer reduced rates from certain providers.
• Check with the Department of Insurance to verify that the discount plan is registered, as required by Missouri law.
• Before purchasing, verify advertised claims that specific doctors, hospitals, clinics, pharmacies and other providers offer discounts to members of the plan. Say no to any plan that won't give you a list of participating providers before you buy.
• Be suspicious of any deal that sounds too good to be true, such as "save 60 percent on health coverage."
• Don't pay a large up-front fee to join.
• Find out whether the fees you pay are refundable if you cancel.
• If you have problems with or suspicions about a medical discount plan, file a complaint with the Department of Insurance online or by phone at 1-800-726-7390.

Huff says consumer protection is the number-one priority of the department. He was recently named vice chairman of the National Association of Insurance Commissioners' Market Regulation and Consumer Affairs Committee. The NAIC is the association of insurance regulators in all 50 states.