As medical costs soar, more Americans turn to crowdfunding

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(CBS MONEYWATCH) – More Americans facing costly medical bills are turning to crowdfunding sites to solicit money online from friends, family and even strangers, a new study shows.

Eight million Americans have started campaigns for themselves or a household member to cover a range of medical expenses, from routine care to rare disease treatment, according to a report from the National Opinion Research Center at the University of Chicago, based on a recent survey of more than 1,000 adults.

And more than 12 million Americans say they have started a crowdfunding campaign to help someone outside of their immediate family afford their medical bills. 

While not all campaigns meet their fundraising targets, a collective sense of dismay at the rising costs of health care in the U.S. seems to be motivating Americans to help each other out financially, interviews with experts suggest.

One in five Americans say they’ve donated to such a campaign, according to NORC researchers. Of those:

  • 61% donated to a relative’s, co-worker’s or acquaintance’s crowdfunding campaign
  • 46% donated to a friend’s crowdfunding campaign
  • 35% donated to a campaign for someone they did not know personally

While some respondents were generous, more believe that they shouldn’t have to be. Some two-thirds of survey respondents said the government should bear responsibility for bills patients can’t cover themselves. 

“They still do this, even though they don’t think they should be responsible,” Susan Cahn, senior health care research scientist at NORC, told CBS MoneyWatch. 

“That Americans are helping people they don’t personally know says a lot about how pervasive these medical needs really are,” Cahn added. 

Millions more people gained health insurance under the Affordable Care Act, but even those Americans who are insured cannot always cover their rising out-of-pocket costs including deductibles, copays or coinsurance. 

High-deductible health insurance plans now cover more than four of 10 Americans, according to the U.S. Centers for Disease Control and Prevention, which defines such plans as having a $1,300 deductible for an individual and $2,600 for families. Some health plans’ deductibles are even higher — more than $7,000 for an individual and $15,000 for families. 

Medical bills are the No. 1 reason Americans file for personal bankruptcy, according to a 2019 study from the City University of New York and Harvard University. At the same time, consumers are becoming increasingly comfortable using tools and platforms like GoFundMe.

“As we see the increase in costs, as well as the increasing ability and knowledge of how to use these sites, people are more likely to turn to the internet to do this,” Cahn said.

GoFundMe, which was founded 10 years ago, is the largest crowdfunding site in the world. To date, it has raised more than $9 billion from more than 120 million donations.

About one-third of the donations made through GoFundMe are for medical care, according to CEO Rob Solomon. The site hosts more than 250,0000 medical campaigns per year, which raise more than $650 million collectively, it says.

“When we started in 2010, it wasn’t purposefully set up and built to be a substitute for medical insurance,” Solomon told CBS MoneyWatch last year. “We weren’t ever set up to be a health care company and we still are not. But over time, people have used GoFundMe for the most important issues they are faced with.”

GoFundMe user Brittany Nicole Ferguson created a GoFundMe campaign in December to pay for treatment for her father, who she said recently discovered he had stage 4 lung cancer. He couldn’t meet his $5,000 insurance deductible, meaning he had to pay for his treatment out-of-pocket, she said. So far, Ferguson has raised $276 of her $5,000 goal. 

Another recent GoFundMe campaign surpassed its $40,000 goal, raising more than $50,000 to pay for the breast cancer treatment of a mother of three. Because the patient’s providers are out-of-network, her insurance company is only covering 20% of the cost of treatment, according to the campaign. 

NORC’s Cahn said the research center plans to dive deeper into crowdfunding and study campaigns more closely, including how much Americans typically contribute to campaigns and how successful they are at meeting their goals. 

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