Chapter 6

Personal Risk Management

Slide 2

Why Do You Need Health Insurance?• Health insurance is a plan for sharing the

risk of medical costs.• There are three basic types of plans.

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o Fee-for-serviceo PPOo HMO

• Medicare and Medicaid are government-sponsored insurance.

Slide 3

What Is the Purpose of Disability Insurance?

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• Disability insurance provides income when the insured cannot work due to nonwork-related injury or illness.

• It replaces a portion of normal earnings.

• Short-term, long-term, and social security disability insurance are all options.

Slide 4

Who Needs Life Insurance?

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• Life insurance pays money to a beneficiary upon the death of the insured person.

• Temporary insurance provides a death benefit only.

• Permanent insurance provides a death benefit and builds cash value.

• Group life insurance is available through employers.

Slide 5

Focus On . . .

Health Care Reform• Most Americans will have insurance by 2020.• Purchasing health insurance will be

mandatory.• Citizens cannot be denied coverage for pre-

existing conditions.• Tax increases will pay for health care reform.• A major omission from the reform is a control

on health care costs.

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Slide 6

Success Skills

Dealing With Health Care Fraud

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• Health care fraud is false billing for medical services.o Examples: falsifying a diagnosis to justify

unneeded tests, upcoding, unbundling

• Ten cents of every dollar goes toward fraudulent health care claims.

• Consumers can help prevent fraud.o Examples: ask questions about services and

charges, audit bills, report suspected fraud