First Command News & Events

FOR IMMEDIATE RELEASE - February 5, 2014

Servicemembers Expect Health Care Costs To Rise Under Affordable Care Act, First Command Reports

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FORT WORTH, Texas — Despite reports that the Affordable Care Act will have little impact on the health care benefits of servicemembers, many active-duty families are anticipating higher out-of-pocket expenses under the law, according to a recent survey.

The First Command Financial Behaviors Index® reveals that seven out of ten middle-class military families (senior NCOs and commissioned officers in pay grades E-6 and above with household incomes of at least $50,000) who are aware of the Affordable Care Act expect to pay higher insurance premiums and deductibles. That’s about the same level of expectation reported by members of the general population in the same income range.

The findings are particularly significant because most military families are covered under the military’s health care system, which was excluded from the Affordable Care Act. Called Tricare, the system provides health benefits for military personnel, military retirees and their dependents. Tricare premiums and deductibles are generally considered to be lower than those charged by providers serving the general population, and Congress passed legislation defining the program as meeting the Act’s insurance coverage requirements. Still, military families are unconvinced.

“While Tricare has not been directly impacted by the Affordable Care Act, our survey respondents clearly feel that change is coming their way,” said Scott Spiker, CEO of First Command. “Many middle-class servicemembers and their families expect that the Affordable Care Act will mean higher health care costs, and more than half of them anticipate a worsening of their overall health care experience.”

Military families have good reason to be concerned about the future of their health care benefits. The Joint Chiefs of Staffs recently announced a proposal to curb the growth of military pay and benefits for housing, education and health. Six out of ten survey respondents indicated they were aware of the plan, and roughly three quarters of those people said they felt anxious about it.

Servicemembers are continuing to worry about the impact of military budget cuts and defense downsizing on their financial and professional lives. The Index reveals that 53 percent feel anxious about sequestration. When asked how sequester cuts have been impacting their family, roughly one in four respondents pointed to reduced personal expense benefits (housing, food and clothes), decreased discretionary income for non-essentials and diminished likelihood to be promoted.

“Faced with the possibility of an erosion of health care and other benefits, active-duty families are taking a proactive stance in their personal finances,” Spiker said. “Just over half of military families indicate cutting back on spending and four-in-ten say they are increasing savings. One of the consistent bright spots in our monthly surveys has been the finding that financial planners are having a positive impact on feelings of financial security and confidence. By coaching their clients to spend less, save more and adopt other positive behaviors, knowledgeable financial professionals are helping engender a sense of security in America’s career military.”

About First Command Financial Behaviors Index®

Compiled by Sentient Decision Science, Inc., the First Command Financial Behaviors Index® assesses trends among the American public’s financial behaviors, attitudes and intentions through a monthly survey of approximately 530 U.S. consumers aged 25 to 70 with annual household incomes of at least $50,000. Results are reported quarterly. The margin of error is +/- 4.3 percent with a 95 percent level of confidence. Financial Behaviors Index

About Sentient Decision Science, Inc.

Sentient Decision Science was commissioned by First Command to compile the Financial Behaviors Index®. SDS is a behavioral science and consumer psychology consulting firm with special vertical expertise within the financial services industry. SDS specializes in advanced research methods and statistical analysis of behavioral and attitudinal data.

About First Command

First Command Financial Services and its subsidiaries, including First Command Bank and First Command Financial Planning, assist American families in their efforts to build wealth, reduce debt and pursue their lifetime financial goals and dreams—focusing on consumer behavior as the first and most powerful determinant of results. Through knowledgeable advice and coaching of the financial behaviors conducive to success, First Command Financial Advisors have built trustworthy, lasting relationships with hundreds of thousands of client families since 1958.


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