Medical Crowdfunding Isn’t Just About the Cash

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A 4 year old girl struggles with the symptoms of leukemia. She doesn’t run around and play like she used to do with the other kids, but that doesn’t mean her spirit has become negative. She’s still bright and cheerful despite the many rounds of chemotherapy and the high levels of suffering she endures on a daily basis.

Her parents both work and have good insurance benefits. They don’t have any problems meeting their medical debt obligations. What they’re struggling to find is a way to spend time with their other two children. Thanks to medical crowdfunding, it isn’t the medical debt that is being taken care of by other parents. It’s the money needed for groceries, a caregiver, and other basic expenses.

Medical Crowdfunding Provides a Security Blanket

Kirk Schmidt never thought of himself as invincible. Living in Nebraska with his wife Kathy, he felt like he had a pretty good life. As a former Marine, he had pretty good health benefits. Their family was fully insured and his work as a contract driver was fulfilling. Then one day he found himself in the ICU at his local hospital.

He thought he had the flu. What Kirk really had was a leg infection that spread throughout his body, causing sepsis and attacking his lungs and kidneys. His benefits have high deductibles, coinsurance costs, and out of network costs that aren’t necessarily going to be covered by the VA for the emergency care. Kathy started getting bills two days after he was admitted to the hospital.

She’s only raised $260 out of her goal, but that’s some extra cash that can pay down the debt even a little. What Kirk and Kathy, as well as thousands of families around the world, are starting to discover is that medical crowdfunding could be the easiest way to manage the high costs of health care. When everyone does a little, a lot can happen.

How Fast Has Medical Crowdfunding Exploded?

Not every crowdfunding site allows for medical crowdfunding. For that reason, some sites tend to get more of these campaigns than others. GoFundMe and GiveForward tend to be the two top sites that people choose. In total, about half a million dollars has been raised through crowdfunding across all platforms just to take care of medical debt.

There are 3 specific reasons why the vertical growth of this niche in the crowdfunding world is exploding in size.

1. There is a huge consumer demand for it.
Many families are living paycheck to paycheck and can’t afford a substantial medical bill. Crowdfunding provides an opportunity for relief.

2. Healthcare is expensive.
Even people who are fully insured may have a $6,000 family deductible and be required to pay 20% or more of ongoing care costs. For a 30 day hospital stay, that adds up quickly.

3. It provides hope.
Medical debt can drown a family for years. Crowdfunding provides a hope for instant relief.

There are many great gains that medical crowdfunding can provide for a family. Unfortunately there are also some rare unpleasant surprises that sometimes catch families unaware.

Medical Crowdfunding Isn’t Always Tax-Free

The issue with taxes and medical crowdfunding is whether or not the person providing the cash received something in return. For example, if $200 was donated to a medical crowdfunding campaign and a $50 gift was received, then the amount of the gift may be considered taxable. If nothing is exchanged and money is simply given, then the funds may be tax-free.

In 2014, tax guidelines set forth from the IRS allowed for a donor to contributed up to $14,000 without being subject to what is known as a gift tax. Even if that amount were exceeded by a single donor, however, that tax responsibility would be from the donation end, not the receiving end.

The other issue is simply one of notoriety. People tend to fund medical campaigns when there is a tragic story associated with it. In the case of the Schmidt’s, family and friends are helping, but that’s the extent of their outreach. Kirk is recovering, there isn’t a viral tragedy that can be shared, and so money isn’t donated.

Even if a medical crowdfunding campaign isn’t successful, it can still provide hope and be a way for involved family members to stay busy. The world can always use a healthy dose of hope. As medical crowdfunding grows, so will the chances of having unexpected medical debt taken care of by the global community.