Missouri Officials Crack Down on Unauthorized Health Plans

Missouri officials got 2010 off to a good start, cracking down on a number of companies that were reportedly selling unauthorized health plans in the state.

More than a dozen companies who sent faxes that reportedly advertised unauthorized health insurance in the Show Me State and offer that service could face major penalties and be closed down by the Missouri Department of Insurance.

Documents filed recently state that Missouri's DOI is demanding 14 companies and a dozen individuals respond to allegations that they have defrauded Missouri consumers.

Department officials say they have complaints from nearly 150 consumers that paid these companies and individuals for services that were promoting insurance, using phrases such as "PPO,' "Group Health Plan' and "dependent coverage.'

According to John Huff, director of the Missouri Department of Insurance, Financial Institutions and Professional Registration (DIFP) office, "State law provides serve punishment for any company selling unauthorized health plans in Missouri. 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 pointed out that one consumer had to deal with an unpaid medical bill of over $60,000 after receiving treatment. Another consumer reportedly paid close to $2,000 for membership, then discovered it did not even cover flu shots. Still other consumers were unable to get refunds after canceling their coverage.

Missouri law clearly differentiates between health insurance and discount medical plans.

Insurers are required to be licensed, and discount medical plan providers are required to register. The companies targeted in this recent crackdown were reportedly neither licensed nor registered. The companies were ordered to appear at a hearing to respond to charges, with the possibility of facing cease and desist orders, a $250,000 fine or still other penalties.

Consumers considering a discount medical plan should be cautious and be sure to verify advertised claims that specific doctors, hospitals, pharmacies, clinics and other providers make available discounts to plan members. It is also important to not pay a large up-front fee to join and determine if fees consumers pay are refundable if they have membership canceled.

While many states battle with budget deficits and less employees to handle the load, it is refreshing to see Missouri officials doing their jobs to protect consumers wherever possible.