April 12 (UPI) -- Americans with income tax refunds are using a great deal of the payments on medical expenses, according to a study conducted by JPMorgan Chase Institute.
Taxes are due by April 17, but millions of Americans have already filed their forms and received their refund.
The institute analyzed out-of-pocket spending of 1.2 million Chase account holders who received a refund between 2014 and 2016 and found a "dramatic link between healthcare spending and tax refunds."
"We conclude that cash flow dynamics are a significant driver of out-of-pocket healthcare spending. Consumers' spending on healthcare was significantly affected by cash flow dynamics," the report said. "Even though they were likely to be able to anticipate the amount of the cash infusion that their refund payment would bring, they did not increase their spending until the refund arrived; then, as soon as it arrived, they immediately increased their spending."
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The JPMorgan Chase Institute is a "global think tank dedicated to delivering data-rich analyses and expert insights for the public good," according to a Chase website.
Those who filed earlier in the season put a larger fraction of their refund toward deferred healthcare spending regardless of income, the study found. But those who file earlier tend to be low-income.
In 2016, 73 percent of tax filers received a tax refund, with an average refund of $2,860.
Among those who received their refund in February, almost 64 percent of the healthcare spending was on deferred care. And just over 54 percent who filed several months later used it for the same purpose.
In both groups, most of the money was used to pay bills with service-providers, while a small amount went toward drugs or other medical supplies to be stockpiled, according to the data.
Researchers found overall healthcare spending was 60 percent higher than in a typical week 100 days before. And spending was 20 percent higher for the next 75 days.
Because spending on debit cards increased 83 percent with no offsetting change to credit card spending, "the tax refund was a major factor driving changes in healthcare spending behavior," the report notes.
And 62 percent of spending was paid in-person at healthcare providers. "Cash-flow dynamics influenced not just when consumers paid for healthcare but also when they received it," the report said.
"As an economist, I think of healthcare as being one of those basic necessities, a 'non-discretionary spending' category," Fiona Greig, the Institute's director of consumer research told Business Insider.
She said she thought the money would be spent on non-necessity things, such as a new refrigerator, or eating out.
"What I wouldn't expect is that people go out and spend on these really basic necessities. That was a surprise," Greig said.
