Today is the 2018 tax filing deadline, which means around 40 million tax filers will soon be receiving a refund, if they have not already. The average tax refund is around $2,895, with some geographic variation: in 2016, Maine had the lowest average refund of $2,302 and Texas had the highest of $3,133. How will filers spend their refunds?

According to a new report by the JPMorgan Chase Institute, many will spend this cash infusion on health care. JPMorgan looked at over one million accounts receiving tax refunds in 2016 and then analyzed the influence tax refunds have on out-of-pocket health care spending. The Institute found that among filers who are eligible for a refund, young adults and those with lower income tend to file earlier, potentially because they anticipate larger refunds. Next, the Institute found that in the week following the first refund payments, out-of-pocket spending on health care increased by 60 percent and remained “elevated” for an average of 76 days following the refunds. Moreover, 60 percent of the additional spending was done in person at a health care provider’s office. Because care is often paid for at the time of service, JPMorgan classified this spending as “deferred care,” in contrast to “deferred bill pay”—remote payments to providers—which accounted for the other 40 percent of increased spending. The analysis found that women, young adults, and those with little or no savings were more likely to defer care, with 65 percent of spending by women going towards deferred services. While lower income groups were found to have deferred a larger portion of their spending until the refund arrived, these “cash flow dynamics” (i.e. having the funds available to seek care) were largely consistent across income groups: out-of-pocket health care spending spiked after tax refunds arrived.

This analysis reminds us that, for many, access to health care services is often subject to cash availability. These findings are consistent with two notable trends: first, as out-of-pocket costs increase, individuals defer medical care; and second, deferring care can lead to serious health and financial consequences.

As Out-of-Pocket Costs Increase, Individuals Defer Medical Care

Over the last decade, health insurers and employers have increasingly shifted costs to consumers, most often in the form of higher deductibles and point-of-care cost-sharing (co-payments or coinsurance). Research shows that having a high-deductible plan is a strong predictor of avoiding health care, and as out-of-pocket costs increase, individuals start to defer medical treatment. A 2017 Kaiser Family Foundation survey found that 32 percent of respondents skipped dental care, 23 percent skipped a recommended medical test or treatment, and 21 percent did not fill a prescription due to costs. Sixteen percent of respondents reported cutting prescription pills in half or skipping doses, while 12 percent reported problems obtaining mental health care. Over 60 percent attested that they were “very” or “somewhat” worried that their income would not keep pace with increasing health care prices.

The ACA Has Helped to Address these Challenges, but Cost Concerns Remain

The ACA has made strides in combating these issues by expanding insurance coverage, allowing individuals to obtain preventive care without cost-sharing, requiring coverage of a minimum set of benefits, and capping annual out-of-pocket costs. For example, research shows that the probability of incurring high out-of-pocket costs declined from 2013 to 2014 as marketplace enrollment increased. Expanded coverage has been tied to increased disease detection and better care management, as well as lower financial strain. Emerging data also suggest that the ACA has reduced income inequality, helping make lower-income households more financially secure. Still, while the law has successfully expanded access to comprehensive coverage for millions, costs continue to pose a significant barrier to care. One-third of Americans are still postponing medical care due to costs, medical debt remains the number one cause of personal bankruptcy filings, and 45 percent of Americans reported that they would struggle to pay an unexpected $500 medical bill.

Deferring Care Can Lead to Serious Health and Financial Consequences

As cost-sharing increases, studies show that individuals defer not just unneeded elective care, but also important primary and preventive care, thus placing themselves at greater health and financial risk. Delaying health care can lead to late disease detection and premature death. It can ultimately increase an individual’s out-of-pocket costs if conditions worsen and require more extensive treatment. This is particularly concerning for those with chronic conditions or co-morbidities.

JPMorgan’s study helps highlight how U.S. families manage their health care in an environment of high and rising consumer cost-sharing. Many, even those who are insured, appear to schedule health care services not for when they are clinically appropriate, but rather based on their access to cash. For an unknown number of individuals, this likely means worse health outcomes and fragmented disease management. Insurers and policymakers should keep this research in mind when considering benefit designs and cost-sharing to promote more optimal use of health care services.