For the analysis, researchers examined JPMC Institute Healthcare Out-of-Pocket Spending Panel data to assess how receiving a tax refund affects healthcare spending.
Here are four findings.
1. Consumers’ total out-of-pocket healthcare spending immediately rose after receiving a tax refund, the analysis found. Consumers increased their out-of-pocket healthcare spending by 60 percent in the first week after receiving the payment. Increased out-of-pocket spending on healthcare continued for about 75 days after consumers received a tax refund, rising 20 percent during that time period.
2. Consumers’ out-of-pocket healthcare spending using debit cards increased by 83 percent in the first week after receiving a tax refund, according to the analysis. During that same time period, consumers’ electronic payments on healthcare increased by 56 percent, while credit card spending remained unchanged.
3. A majority of consumers’ additional healthcare spending after receiving a tax refund (62 percent) took place in-person at healthcare providers for services they had previously deferred, according to the analysis. Thirty-seven percent of spending were remote payments for outstanding bills.
4. Consumers who had more money in their checking accounts before receiving a tax refund were less affected by cash flow dynamics, according to the analysis.
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