When Hayden Myer made an eye doctor’s appointment for the end of April, he told the clinic that he might not show up for the visit if his tax refund didn’t arrive in time.
The 27-year-old, who says his vision is bad enough that he avoids driving at night, has been wearing a four-year-old pair of glasses since he ran out of contact lenses last summer. He’s expecting about $265 from his refund.
Myer and many other Americans rely on getting money back at tax time to pay for important health needs. It’s a result of thin household savings colliding with rising medical prices and high-deductible insurance plans that expose them to greater health expenses.
“I’ve never been able to use my return for anything that is a leisure or a pleasure,” said Myer, who earns about $40,000 a year running a peer-support line for a mental-health nonprofit in Richmond, Virginia.
The federal deadline for people to file income taxes is April 15. Out-of-pocket spending on health care jumps about 60% in the week after people get their refunds, according to an analysis of account data published last year by the JPMorgan Chase Institute, a research group that draws on the bank’s data. The bulk of that money is spent during face-to-face encounters at clinics, hospitals or other medical providers.
That suggests people aren’t merely using refunds to pay down old debts; they’re waiting until they have cash in hand to get treated.
“It was surprising, and I’d go so far as to say alarming,” said Fiona Greig, director of consumer research at the JPMorgan Chase Institute. “Those are visits that would have taken place three weeks earlier, had the tax refund arrived three weeks earlier.”
Refunds trigger about a 10% increase in the number of people making in-person health care payments on weekdays, according to the group’s research. Other research from the institute has shown that refunds are also frequently followed by increased cash withdrawals, credit card payments and spending on durable goods.
Tax refunds — the difference between the money withheld from workers’ paychecks and the taxes they actually owe — are the biggest single payment many households receive all year. The average federal refund taxpayers received this spring was $2,873, according to IRS data on filings as of March 29.
More than 1 in 3 working-age Americans skipped a doctors’ visit or medical test, or didn’t fill a prescription, because of the cost last year, according to a recent survey by the Commonwealth Fund, a nonprofit health-research foundation.