More consumers of health insurance in El Paso are using their tax refund to meet healthcare needs.

Apr 14, 2018

As premiums and deductibles become pricier, new research reflects that El Paso health insurance consumers are allocating dollars from tax refunds for healthcare treatment.

If history is any indication, El Paso health insurance consumers may be using some of their tax refunds to pay for healthcare expenses.

Typically, Americans do not look forward to the annual ritual of organizing all of their financial information and filing their federal taxes. But healthcare analysts have noticed a trend in the last several years. Tax refund money is being used to pay for necessary healthcare that had been put off or for deferred care.

Research conducted on national 2016 tax refund data by The JPMorgan Chase Institute revealed that if early filers (e.g. received a refund in February) utilized any tax refund money for healthcare, 64 percent was allocated to deferred medical care. More than half (55 percent) was used for deferred care regardless of when taxes were filed. The remaining funds were used to pay for outstanding bills to service-providers, prescription drugs and/or medical supplies that they planned to stockpile.

The study also showed that the overall level of health care spending was 60 percent higher one week after receiving a refund than any week over the 100 days before. Out-of-pocket spending on debit cards also had increased 83 percent. A majority of spending (62 percent) was done in-person at health-care providers.

Consumers of health insurance in El Paso are showing the same type of behavior as other Americans. Often times, low-income and young people with less savings, are more apt to postpone healthcare. Consequently, when they receive their tax refund it is being used as an alternative savings account. Rick Thornton, an El Paso health insurance agent, states, “Many of my clients have fixed budgets and can’t afford to pay for certain health treatments upfront. Although it’s not ideal, it is perfectly reasonable for them to use portions of their tax refund dollars to pay for care.”

Healthcare reform advocates believe the government could enact legislation to alleviate some of the challenges Americans are facing. One example would be the provision of periodic refund payments. This would allow consumers to be able to meet their health needs throughout the year and mitigate catastrophic problems like delayed cancer diagnosis or ignored diabetes treatment.

Given the majority of El Paso residents do receive a tax refund, healthcare consumers are actively showing tax refund dollars are a legitimate way to invest in their own health.

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