DOD Lacks Data to Determine the Need for Income Protection Programs

DOD lacks sufficient information from the survey data to determine the  magnitude of income loss or gain experienced by reservists, the causes for  this change, and the effects of income loss on reserve retention. DOD self-reported  survey data from past and current military operations indicate that  reservists have experienced widely varying degrees of income change  when they are activated. While many reservists have reported lost income  during activation, more than half of reservists have reported either no  change or a gain in income. Such data are critical for  assessing the full nature and scope of income change problems and in  developing cost-effective solutions. DOD Faces Challenges in Family Readiness and Support

Although DOD has placed greater emphasis on family readiness, many  reserve families indicate they do not feel prepared for call-ups. DOD has not assessed the financial well-being of  reserve families, nor has it assessed the impact of reservists’ financial  problems on mission readiness. DOD Has Identified Outreach Challenges for Personal Financial Management Programs

Personal financial management, one of DOD’s core family support  programs, illustrates the continuing challenges DOD faces in providing  outreach to reservists. These challenges include improving access to and  awareness of personal financial management programs for reservists and  their family members. For  example, DOD does not know the impact this proposal would have on  recruiting and retention, the effects on active duty personnel, the extent  reservists and their families might participate in such a program, or the  impact on the TRICARE system. Cost estimates range up to $5.1 billion a  year. 107-314, sec. Estimates from  DOD’s 2000 survey showed that nearly 80 percent of reservists had health  care coverage when they were not on active duty and about 20 percent did  not. DOD Has Not Assessed the Need for or Ramifications of Expanding TRICARE to Reservists Not on Active Duty and Paying Health Insurance Premiums of Activated Reservists

To further expand reservists and their family members’ access to health  care, Congress is considering legislation to offer TRICARE to reservists  when they are not on active duty. In addition, a high percentage of reservists’ civilian  employers who currently pay some or all of health care premiums for  reservists during activations could discontinue providing such assistance  if DOD makes this coverage available to reservists year-round. However, these data are questionable because it is unclear what  survey respondents considered as income loss or gain in determining their  financial status. Of these three, only the last is targeted at reservists who (1) fill  critical wartime specialties, (2) experience high degrees of income loss  when on active duty, and (3) demonstrate that income loss is a significant  factor in their retention decisions. In the area of family support, DOD and the military services have taken  steps to improve personal financial management programs. Our review of DOD  survey data showed that reservists reported having many of the same  financial problems as their active duty counterparts. Recent improvements have been made to reservists and their families’  access to TRICARE when the member is activated. DOD has not yet identified problems reservists and their  families have experienced with access to health care during mobilizations  since September 11, 2001, such as problems in maintaining continuity of  health care; the causes of these problems; and their effects on readiness,  recruiting, and retention. U.S. To evaluate a legislative proposal for DOD to offer TRICARE to reservists  and their families when members are not on active duty, we reviewed  relevant GAO reports. 2002 Survey of Spouses of Activated National Guard and Reserve Component Members

The 2002 survey of spouses was sponsored by the Office of the Assistant  Secretary of Defense for Reserve Affairs to assess the needs and concerns  of National Guard and Reserve families prior to and during activation, to  assess the status of family support initiatives, and to gather data from  spouses of members who have been activated since September 11, 2001.
Why GAO Did This Study

Since the 1991 Persian Gulf War, National Guard and Reserve personnel have been deployed to a number of contingency operations. Since September 2001, about 300,000 reservists have been called to active duty, and the pace of reserve operations is expected to remain high for the foreseeable future. House Report 107-436 accompanying the Fiscal Year 2003 National Defense Authorization Act (P.L. 107-314) directed GAO to review compensation programs for reservists serving on active duty. GAO evaluated information on income change reported by reservists when activated; reserve families' readiness for call-ups and their awareness and use of family support programs, focusing on personal financial management; and a legislative proposal for the Department of Defense (DOD) to offer TRICARE, the military's health care program, to reservists and their families when members are not on active duty.

What GAO Found

DOD lacks sufficient information on the magnitude, the causes, and the effects of income change to determine the need for compensation programs targeting reservists who (1) fill critical wartime specialties, (2) experience high degrees of income loss when on extended periods of active duty, and (3) demonstrate that income loss is a significant factor in their retention decisions. Such data are critical for assessing the full nature and scope of income change problems and in developing cost-effective solutions. DOD self-reported survey data from past and current military operations indicate that activated reservists have experienced widely varying degrees of income change. While many reservists lost income, more than half of reservists had either no change or a gain in income. However, survey data are questionable primarily because it is unclear what survey respondents considered as income loss or gain in determining their financial status. DOD has placed greater emphasis on preparing reservists' families for potential call-ups, yet survey data show that one-third of spouses do not feel prepared, over half of reservists are not aware of family support programs, and more than 90 percent of spouses do not use these programs. Personal financial management, one of DOD's core family support programs, illustrates the continuing challenges DOD faces in providing outreach to reservists. The 2000 survey data showed that 61 percent of reservists did not know whether personal financial management services were available. The survey also showed that reservists have financial problems similar to their active duty counterparts. DOD is taking steps to improve personal financial management, but it has not assessed the financial well-being of reserve families, assessed the impact of reservists' financial problems on mission readiness, or determined how to tailor its programs to reservists. Available DOD data do not identify a need to offer TRICARE to reservists and their families when members are not on active duty. Estimates from DOD's 2000 survey showed that nearly 80 percent of reservists had health care coverage when they were not on active duty. This rate is similar to that of comparable groups within the overall U.S. population. DOD has expressed concern over the estimated costs of this proposal. Cost estimates range up to $5.1 billion a year. However, DOD has not fully assessed the ramifications of this proposed legislation, including the impact on recruiting and retention, the effects on active duty personnel, the extent reservists and their families might participate in such a program, or the impact on the TRICARE system. In addition, a high percentage of reservists' civilian employers who currently pay some or all of health care premiums for reservists during activations could discontinue providing such assistance. A number of recent improvements have been made to reservists and their families' health care when members are activated. However, DOD lacks data on problems reservists and their families have experienced with health care since the mobilizations following September 11, 2001; the causes of these problems; and their effects on readiness, recruiting, and retention.