For centuries people turned to their neighbors, family, friends, churches, the government and local organizations if they were in need of help. The arrival of the Internet has changed that as today, “crowd sourcing funding” (CSF), has emerged as one of the leading way to try and secure money to pay off medical bills. In fact billing offices will recommend it as a way to reduce debt. But before you launch a campaign via “Go Fund Me” or another CSF site, be aware of what you’re getting into.
Are you comfortable with people knowing your story?: Keep in mind that the web has a long memory and if you use this strategy current and future employers, partners, neighbors and others will have access to that information now and well into the future.
If you are on Medicaid and Supplemental Security Income (SSI): CSF can be counted in the eligibility calculation. Medicaid income limits vary by state, while SSI benefits are based on countable income and state-specific limits. If you are enrolled in Medicaid or Social Security Income (SSI), make sure you understand the income and asset limitations in your state. You should also communicate any changes in your income as soon as possible, and seek assistance from a consumer-focused nonprofit group or tax professional when needed. Failing to take the appropriate steps could jeopardize your federal and state benefits. Good RX
Tax Impact: If you donate to someone’s CSF, you are not entitled to a tax deduction. Generally CSFs for medical expenses are considered tax free as they are viewed as a gift. However laws do change and it’s best to check first. According to Go Fund Me, Donations made to personal GoFundMes are generally considered to be "personal gifts" which, for the most part, are not taxed as income in the United States. Additionally, these donations are not tax deductible for donors.
However, there may be particular case-specific instances where the income is taxable for organizers. For example, if the donations are considered income to the recipient.
The best way to ensure you're in compliance with the tax laws is to maintain adequate records of donations received and consult with a tax professional. As part of GoFundMe’s Terms and Conditions, you have represented that you are not providing any goods or services in exchange for the donation of funds. As a result, GoFundMe will not provide you with any tax documentation for money raised on your fundraiser, nor will GoFundMe report the funds you collected as earned income.
Many do not come close to reaching their target: In “GoFailMe: The Unfulfilled Promise of Digital Crowdfunding,” a book based on research involving 50 in-depth interviews, a survey of over 600 crowdfunding users between 2018 and 2021 and a data analyzes from nearly 2 million GoFundMe campaigns, the authors explain that behind GoFundMe’s winners, whose stories are paraded on the site’s front page and its podcast – “True Stories of Good People” – stands a long line of also-rans. They raise almost no money this way but are put through an emotional roller coaster and give up a considerable amount of their privacy and personal data….. crowdfunding works best when there’s a crowd willing and able to help, which usually begins with family, friends and acquaintances. But if your family and friends are broke, like you, then there’s little help to be had, no matter how good your campaign is or how deftly you promote it. We estimate that only about 17 percent of U.S. GoFundMe campaigns for health care and emergency costs meet their goal. We’ve also found that most of the funds raised are concentrated among a very small group of campaigns.
Another study Medical Crowdfunding and Disparities in Health Care Access in the United States, 2016‒2020 collected data on 437,596 US medical Go Fund Me campaigns and found, “Campaigns raised more than $2 billion from 21.7 million donations between 2016 and 2020. Returns were highly unequal, and success was low, especially in 2020: only 12% of campaigns met their goals, and 16% received no donations at all. Campaigns in 2020 raised substantially less money in areas with more medical debt, higher uninsurance rates, and lower incomes.
Having followed CSF for quite a while now, for emergencies, such as floods and fire, as well as medical, I’ve seen very similar results to both these studies-people/families who were held in high esteem by the community raised the most money.
Options other than CSF
Review your bill: A basic step that many people over look, go through your medical bills carefully. Mistakes frequently happen, including such things as duplicate billing or being billed for a procedure you never had. After care or treatment, you will receive a statement from your insurance called an Explanation of Benefits (EOB). This shows what insurance paid and what you still owe. Look very closely at the bills and EOB you receive. In some cases, they can have errors.
- Don’t pay any bill until you have the final EOB from your insurance company. If you have more than one plan, wait until you have the EOB from all plans.
- Review bills for any errors. Contact the billing department if there’s a difference between your bill and the EOB.
- Keep and review approval or denial letters or prior authorizations for medical care from your insurance. Stay organized by keeping a record of conversations with anyone you speak to about your medical bills. Note name, dates, and what you were told.
Negotiate: Check to see about-lower rates, reduced rates if you pay within a specific time period and payment schedules. Note that with payment plans, for many hospitals, as long as your making your payment each month they tend to leave you alone. However, check to see if they attach fees to a payment plan.
Financial Assistance Programs: Free or discounted health care can help patients who do not have insurance and patients who have insurance but are underinsured. Hospital are required to provide a written Financial Assistance Policy (FAP) and a Emergency Medical Care Policy. The FAP must include: A brief description of the eligibility requirements and assistance offered under the FAP. A brief summary of how to apply for assistance under the FAP. The direct website address (or URL) and physical locations where the individual can obtain copies of the FAP and FAP application form. Instructions on how the individual can obtain a free copy of the FAP and FAP application form by mail.
Check local resources: Consider contacting the following:
· Community Action Agency (CAA) can work with you to identify and help you access resources locally, state and at the federal level. To find the closest CAA to you, call 2-1-1 or click here to find your state’s website.
· Churches, civic groups, local charities, United Way, employer
· Condition specific organizations such as the American Cancer Society. These organizations can help connect you with financial aid resources, assisting with appeals, and support for non medical needs such as travel, food, hotels etc.
Talk to friends, family, neighbors and co workers as long as you feel comfortable sharing your personal information. Many times they know of resources or have helpful suggestions that you may not have thought of.
Resources to consider
· Need Help Paying Medical Bills? 9 Programs and Organizations That Offer Assistance
· Stressed About Bills? These Nonprofits Offer Financial Aid to Patients and Families
· How to Pay Off Medical Debt from AARP
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