Servicemembers and their families are growing increasingly worried about the cost of healthcare, reflecting uncertainty about how military budget cuts and defense downsizing may affect their government-provided medical benefits.
The latest survey findings from the First Command Financial Behaviors Index® reveal that roughly one third of middle-class military families (senior NCOs and commissioned officers in pay grades E-6 and above with household incomes of at least $50,000) believe sequestration will mean they must take increased responsibility for their healthcare costs.
When they were asked to identify the financial issues that concern them the most, “cost of health insurance” was selected by 32 percent, up 8 points from the previous month. And “ability to cover medical expenses” was selected by 19 percent, up 5 points. Both numbers represent a monthly high for 2013.
“These findings represent the latest development in a continuing consumer concern that we have been monitoring for the past two years, a concern triggered in part by proposed changes to the military’s health insurance program known as Tricare,” said Scott Spiker, CEO of First Command Financial Services, Inc. “In 2011, concerns focused on the possibility of increased out-of-pocket costs during retirement.Today we are seeing those concerns extend to the present with fears that health and medical costs may increase to take a bigger bite out of their current finances.”
Active-duty families have been responding to these and other sequestration-related concerns through a variety of belt-tightening behaviors. The Index reveals they are:
- Cutting back on everyday spending (42 percent)
- Saving more (22 percent)
- Decreasing the aggressiveness of investments (11 percent)
- Moving investments to cash (6 percent)
- Starting to work with a financial planner (4 percent)
“Working with a financial planner can be a particularly effective strategy for getting squared away in your finances,” Spiker said. “Our most recent quarterly survey data shows that those with a financial planner have added an average of $3,740 per month in savings. In contrast, those without a planner saved an average of $2,270 per month. Families who work with a financial coach report feeling better about their finances, too. 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.”
About the 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.www.firstcommand.com/research
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.
First Command Financial Services, Inc., is the parent of First Command Financial Planning, Inc. (Member SIPC, FINRA), First Command Insurance Services, Inc. and First Command Bank. Financial planning services and investment products, including securities, are offered by First Command Financial Planning, Inc. Insurance products and services are offered by First Command Insurance Services, Inc., in all states except Montana, where as required by law, insurance products and services are offered by First Command Financial Services, Inc. (a separate Montana domestic corporation). Banking products and services are offered by First Command Bank. In certain states, as required by law, First Command Insurance Services, Inc. does business as a separate domestic corporation. Securities products are not FDIC insured, have no bank guarantee and may lose value. A financial plan, by itself, cannot assure that retirement or other financial goals will be met. First Command Educational Foundation is a 501(c)(3) public charity. It is not affiliated with First Command Financial Services, Inc., or any of its affiliated entities.