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People are waiting for their tax refunds to spend on healthcare, and it shows how the expenses are dominating our financial lives

According to a January report from the JPMorgan Chase Institute, there was an increase in healthcare spending by 60% the week they get their tax refund.

  • For many,
  • According to a January report from the JPMorgan Chase Institute, there was an increase in healthcare spending by 60% the week they get their tax refund, suggesting that people waited to go to the doctor or pay for healthcare costs until the refund came in.
  • In a report released Tuesday, the Institute found that people who filed early tended to spend more of their refund on deferred healthcare, regardless of income.

Filing taxes may be viewed as a mundane annual task that needs to be completed by April 17.

But for many, a large portion of the money that comes in the tax refund is getting put to use on healthcare costs that have been put off.

According to a report from the JPMorgan Chase Institute based on 1.2 million tax refunds from 2016, there was an increase in healthcare spending by 60% the week they get their tax refund. That stayed consistently elevated over the next 75 days with healthcare spending increasing over the rest of the year by an average of 20%, and the payments were mostly connected to debit cards rather than credit cards with later payment dates.

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"This really is a liquidity story," Fiona Greig, director of consumer research at the Institute, told Business Insider.

In a follow-up report released Tuesday, the Institute found that people who filed early tended to spend more of their refund on that deferred healthcare, regardless of income.

"People who file earlier tend to receive larger refunds, and they tend to be low-income. But even despite that, deferred care is a phenomenon across the income spectrum, and people's cash flow dynamics are influencing the out-of-pocket healthcare spending even among the high-income quintile," Greig said.

That result, along with the amount of the refund spent on healthcare compared to other things (debit card spending on healthcare rose by 83% while non-health spending increased by 54%), surprised Greig.

"As an economist, I think of healthcare as being one of those basic necessities, a 'non-discretionary spending' category," Greig said. For example, she'd predict the tax refund is used to pay down debt, buy a new refrigerator, or maybe simply go out to eat because of the extra cash. That is, she thought the money would be spent on non-necessity things.

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"What I wouldn't expect is that people go out and spend on these really basic necessities. That was a surprise."

The decision to spend on healthcare shortly after getting a tax refund is happening at a time when people are feeling pressure over rising healthcare costs. For example, a

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