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Military Families Fear End Of Low-Cost Healthcare, First Command Reports

FEBRUARY 12, 2015, FORT WORTH, Texas – America’s career servicemembers are increasingly worried that the era of low-cost healthcare for military families may be coming to an end.

The latest results of the First Command Financial Behaviors Index® reveal that 63 percent of middle-class military families (commissioned officers and senior NCOs in pay grades E-6 and above with household incomes of at least $50,000) are concerned that the military’s TRICARE healthcare system may start charging fees for services that they currently receive at no cost. This concern comes on the heels of the passage in December of the National Defense Authorization Act, which includes changes to TRICARE pharmacy fees and policies as a way to cut personnel costs as part of sequestration and defense downsizing.

During the past year servicemembers have grown increasingly concerned over sequestration-driven changes to their healthcare benefits. The Index reveals that 35 percent of December survey respondents expect to shoulder increased responsibility for healthcare costs. That’s up from just 19 percent at the end of 2013, and it represents the highest monthly total since May 2013.

Increased responsibility for healthcare costs is one of the biggest sequestration-related concerns expressed by military families, exceeded only by concerns over a reduction in retirement benefits (37 percent) and reductions in annual pay increases (39 percent).

Healthcare is a significant form of compensation for many military families. When December survey respondents were asked to rate the importance various benefits, three of their top six were related to healthcare:

* Basic pay (ranked No. 1 by 34 percent of respondents)
* Retirement pay (22 percent)
* Dependent healthcare benefits (13 percent)
* Healthcare benefits for retirees under 65 years of age (11 percent)
* Allowances for housing and subsistence (11 percent)
* Healthcare benefits for Medicare-eligible retirees (9 percent)

“Our men and women in uniform strongly value their healthcare benefits, so it’s no surprise to see that a growing number of them fear that sequestration will mean shouldering more of these costs,” said Scott Spiker, CEO of First Command Financial Services, Inc. “These are real concerns. The modest change in pharmacy fees we saw in the National Defense Authorization Act is yet another indication that seemingly everything is on the table. Servicemembers are dealing with a second year of reduced pay raises. Their housing allowances are being reduced. Force reductions, reduced promotion rates, possible cuts to retirement benefits — military budget cuts are a reality. Four out of five military families say they expect to be financially impacted by these cuts.”

Active-duty families have been responding to budget cuts through a variety of belt-tightening behaviors. The Index reveals they are:

* Saving more (47 percent)
* Cutting back on everyday spending (40 percent)
* Decreasing the aggressiveness of investments (26 percent)
* Moving investments to cash (20 percent)
* Starting to work with a financial planner (14 percent)

“Working with a financial planner can be a particularly effective strategy for getting squared away in your finances,” Spiker said. “Families who work with a financial coach save more than their do-it-yourself colleagues, and they also report feeling better about their finances. We anticipate increasing demand for financial planning assistance from military families as they strive to deal with the uncertainties of sequestration and long-term defense downsizing.”

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Filed Under: Benefits, News

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Navy Showcases P-8A Capabilities in Indonesia

AUGUST 18, 2022 – Patrol Squadron (VP) 5 deployed an aircraft, aircrew, and maintenance personnel to Batam, Indonesia, in support of Exercise Super Garuda Shield 2022 from July 31 to August 6. The crew provided a P-8A static display for Gen. Andika Perkasa, commander of the Indonesian National Armed Forces (TNI), and his chiefs of […]

Army Develops Future Soldier Preparatory Course

JULY 27, 2022 – In response to the most challenging recruiting environment since the start of the all-volunteer force in 1973, the Army is implementing an innovative new program to prepare recruits who are en-route to initial military training to meet or exceed our rigorous standards. The Future Soldier Preparatory Course pilot program, which is […]

Top 5 University Scholarships for Military in the UK

JUNE 20, 2022 – The cost of a college education can be daunting and unaffordable for many university students in the UK. For the students who have set their hearts on joining the military, there are several scholarships available for them.  These scholarships help military students overcome the financial challenges of attending college. A University […]

Federal Hiring Summit for Transitioning Service Members

AUGUST 10, 2022 – Commander Navy Installation Command Headquarters, Fleet and Family Support Center is hosting a federal hiring summit Aug. 15-18. Although the summit is hosted by the Navy, all military personnel and their spouses can attend this virtual event. Those who are preparing for their end of service or actively transitioning out of […]

Military Consumer Month Focuses on Financial Literacy

JULY 29, 2022 – With inflation soaring in the U.S. and elsewhere, many among the military community, including reservists and veterans, are struggling to make financial ends meet and are in need of a good battle plan to beat their budget foes. Anyone in such a predicament would do well to employ the Department of […]

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