Jan 10, 2018

People spend their tax refunds at the doctor

New data from the JPMorgan Chase Institute suggests that when Americans get a tax refund, they use it to take care of health care needs they had been delaying.

The bottom line: People put off health care services based on their ability to pay.

The details:

  • Out-of-pocket health care spending rose by 60% in the week following a tax refund, according to a JPMorgan survey of more than 1 million checking accounts.
  • Most of that extra spending is in-person payments to providers — in other words, people are mostly using their extra cash to go to the doctor, not just to make other payments.
  • Health care spending remained higher for about 75 days after getting a tax refund, then returned to normal.
  • Payments using debit cards spiked by more than 80%. Credit card payments didn’t change.

The bottom line: That has some pretty significant implications as the system keeps heading toward insurance plans with higher out-of-pocket costs.

  • On the one hand, making people more attuned to what they spend on health care is a big part of the case for high-deductible plans.
  • But if people are putting off care they really need until they come into some extra cash, that’s not good for them or their long-term health care costs.

Go deeper

Situational awareness

Photo: Drew Angerer/Getty Images

Catch up on today's biggest news:

  1. Scoop: New White House personnel chief tells Cabinet liaisons to target Never Trumpers
  2. Trump misrepresents 2020 Russia briefing as Democratic "misinformation"
  3. Bernie Sanders takes aim at Bloomberg: "Trump will chew him up and spit him out"
  4. Nearly half of Republicans support pardoning Roger Stone
  5. Scoop: Lyft acquires cartop advertising startup Halo Cars

Sanders takes aim at Bloomberg: "Trump will chew him up and spit him out"

Photo: Mario Tama/Getty Images

Bernie Sanders told CBS "60 Minutes" that he was surprised by Mike Bloomberg's lackluster performance at Wednesday's Democratic debate.

What he's saying: "If that's what happened in a Democratic debate, you know, I think it's quite likely that Trump will chew him up and spit him out."

Scoop: Lyft acquires cartop advertising startup Halo Cars

Photo: Drew Angerer/Getty Images

Lyft has acquired Halo Cars, a small startup that lets ride-hailing drivers earn money via ad displays mounted atop their cars. Lyft confirmed the deal but declined to share any details.

Why it matters: Ride-hailing companies are increasingly eyeing additional ways to generate revenue, and Lyft rival Uber has been quietly testing a partnership with New York-based Cargo that gives it a cut of the advertising revenue, as I previously reported.