Americans Use Tax Refunds to Pay for Healthcare
As Americans scramble to finish filing their 2017 taxes ― due April 17 ― let’s look at where a big chunk of tax refunds are spent: deferred healthcare. Because of out-of-pocket expenses and high deductibles, people are waiting until after they receive tax payment back to have medical conditions, treatment, and procedures done.
A JP Morgan Chase Institute report showed socioeconomic data for 1.2 million households who filed taxes and received tax refunds in 2016. The data determined certain demographic groups spent a lot of it on healthcare. According to an article on the CNBC website, the 2016 JP Morgan Chase analysis showed:
- In February 2016, 64 percent of tax refund spending payed for deferred healthcare.
- In March 2016, 55 percent of tax refund spending payed for deferred healthcare.
- The week after receiving a refund, healthcare spending was 60 percent higher than during the weeks within 100 days before.
- Out-of-pocket healthcare spending on debit cards increased 83 percent with no offsetting change to credit-card spending.
- 65 percent of tax refund spending by women was used for healthcare.
- Nearly 70 percent of spending by tax filers with low-income or little-to-no-savings paid for healthcare.
After analysis of the data, JP Morgan Chase Institute President and CEO Diana Farrell said, “it’s increasingly clear that families are using their tax refunds as a zero-interest savings vehicle” and added “if consumers have a health need at some other time of the year, they might have to delay treatment until cash arrives during tax time.”