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Placing a Value on the Health Care Benefit for Active-Duty Personnel

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The availability of health care for active-duty military personnel and their families is a fundamental component of the services commitment to support their personnel. However, military health care benefits are not routinely counted as an element of military compensation in reports given to individual members, nor in comparisons of military versus civilian compensation. This may be because military health care benefits are provided in such a way that it is difficult to account for the value accruing to individuals. For many military families, health care is received in-kind, that is, the family pays no health insurance premium and pays nothing for the care and prescriptions received at military treatment facilities. However, unlike some other benefits that are received in-kind, such as housing, there is no corresponding allowance for members who opt out of the system indeed, individual military members are not allowed to opt out of the military health care system. In addition, members are selected to enter the military based on their health, and, as it is for other young adults, the demand for health care is considerably less than it is for the elderly. Thus, younger members may not fully appreciate the value of their health care coverage. Despite these factors, the authors argue that the military health care system represents a substantial benefit to military members and families, largely freeing them from concern about receiving health care when the need arises. The purpose of this research is to consider how a reasonable monetary value might be attached to the military health care benefit from the perspective of the active-duty service member and his or her family. Including the value of the health care benefit as an element of military compensation would make militarycivilian pay and benefit comparisons more comprehensive and accurate, and bring greater visibility to the value of the health care benefits to members.

Subject Categories:

  • Economics and Cost Analysis
  • Medicine and Medical Research
  • Military Forces and Organizations

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