Can Crowdfunding Make Your Medical Bills More Affordable?

Fundraising Tips

To raise your chances of success with a medical expenses crowdfunding campaign, it helps to plan ahead and stay involved with the project throughout the process.

Legal and Tax Tips for Crowdfunding

Donations from an online fundraiser are usually considered "gifts" by the IRS and not taxable income. But there are exceptions, so it's important that you talk to an accountant.

If you get public benefits, check with a lawyer before you launch your fundraising campaign. Laws differ widely from state to state, and sometimes between counties, but you may have limits on your assets that a windfall of donations could exceed.

"Losing Medicaid can be horrible for someone with very high medical expenses," says Marianne Johnston, a lawyer in Moorestown, New Jersey, whose specialties include elder law and Medicaid.

"[Crowdfunding] can be a wonderful assistance to people really in crisis. It's a very positive aspect in that goal. But just be very careful with making sure that your good intentions don't really become a burden for the individual or the individual's family," she says.

How to Not Get Scammed 

Thirty-nine percent of Americans have donated to a crowdfunding campaign to cover someone else's medical bills. To make sure you're really helping someone and not getting scammed:

Confirm that the request is real. For instance, if a friend shares a fundraiser link, ask how they know the person who needs help. If a campaign mentions a nonprofit, research it and make sure it's a trusted organization. You could even do a reverse image search of photos, making sure they don't appear under someone else's campaign.

Know where the money's going. Transparency is key. Does the organizer have a clear link to the person who needs help? Are they clear on how the money will be used? Check to see if family members and friends are donating money and leaving personal notes of support.

Ask questions. It's OK to message the organizer with questions. If something still feels off, reach out to the crowdfunding platform. For instance, GoFundMe allows you to report a fundraiser, which flags it for review.

Other Ways to Pay for Healthcare Costs

Besides crowdfunding, some other types of online platforms offer to help pay your medical bills. These include:

Healthcare sharing ministries (HCSMs). If you join one of these faith-based nonprofit groups, you'll contribute money toward other members' medical bills, and vice versa.

CrowdHealth. This for-profit company operates a lot like an HCSM but may also try to negotiate a lower cost for your big medical expenses, like surgery.

Joining these platforms doesn't guarantee that your bills will be covered. They also have specific rules. For instance, you'll have to pay some out-of-pocket costs before you can submit a bill to try to get reimbursed.

HCSMs often exclude coverage for preexisting conditions, behavioral health, and maternity care.

CrowdHealth has weight requirements and doesn't allow tobacco users to join. Some procedures and treatments, like long-term prescriptions and fertility treatments, also aren't eligible to be crowdfunded.

Because these companies aren't regulated like insurance companies, they aren't required to cover every claim that's submitted or even have enough money on hand to pay every claim.

The Reality of Crowdfunding for Medical Bills 

Some data shows that only 10% of medical crowdfunders reach their target goal. But when your health or the health of a loved one is at stake, the attempt can feel worth it.

Jessica Stacy's 13-year-old son, Seth, lives with the same rare genetic disease as Harlow Graskewicz-Prado. Most of the time, he relies on a wheelchair, although he can use braces and a walker with help. If it were up to Seth, he'd be fishing every day.

"We've actually taken him to a couple spots that weren't handicapped accessible, and we got his power wheelchair stuck a couple times, and it was really bad," Stacy says. "We had to have a park ranger pull him out."

Three months ago, Stacy began a GoFundMe to afford the same groundbreaking new therapy for her son that Harlow received. Their doctor is hopeful that it can help Seth become more functional. But the hospital where the treatment will be given won't accept Stacy's health insurance.

Although the total cost for two years of treatment is six figures, Stacy started a GoFundMe asking for $30,000 so Seth could at least get his first infusion. She quickly raised $5,000, "but then it just kind of came to a standstill," she says. "That's really all we've been able to raise, and so we're kind of stuck now."

Local restaurants in their rural West Virginia town are holding fundraisers for Seth, but only bring in a few hundred dollars at a time. Still, Stacy isn't giving up hope.

"I don't really like having to ask for help, but at the same time, if I think that it's going to really help my son, then I don't really mind it."