The Downside of Crowdfunding for Medical Bills: 7 Options to Try Instead

Medical debt is common in the United States, with approximately 14 million Americans owing over $1,000 in medical debt and about 3 million owing medical debt of more than $10,000, according to Kaiser Family Foundation.

Some people who are overwhelmed by medical bills turn to social media for help. They may create a campaign on a digital platform like GoFundMe and ask their friends, family, acquaintances and strangers on the internet to help them escape their financial nightmare.

Related: Chronic Illness and Disability: 8 Tips to Cope

Maybe you’ve seen GoFundMe campaigns go viral and raise tens or even hundreds of thousands of dollars, but these are the exception, not the rule. One study of GoFundMe medical campaigns shows that 90% of campaigns fail to reach their funding goals, and on average, campaigns raise just 40% of their goals.

Crowdfunding isn’t a reliable way to pay for medical bills, so here are seven better strategies to consider:

1. Get the best health insurance you can afford

Be sure you’re familiar with the out-of-pocket costs, including copays, coinsurance, deductibles, and your out-of-pocket maximum. If you need help understanding your policy, contact your insurer and ask someone to walk you through your potential out-of-pocket costs.

2. Get Medicaid or Medicare if you qualify

If you’re uninsured, you might quality for public health insurance like Medicaid or Medicare. Medicaid helps cover medical costs for some people with limited income and resources, while Medicare is for people 65 or older.

 3. Save in an HSA

If you have a high-deductible health plan, you can open a Health Savings Account (HSA) and set aside pre-tax income to cover health care costs that your insurance doesn’t pay. For the 2024 tax year, the maximum contribution amounts are $4,150 for individuals and $8,300 for families. And if you’re 55 or older, you can add up to $1,000 more as a catch-up contribution. HSA funds can also be used to pay for the costs of long-term care and long-term care insurance premiums.

Related: 6 Reasons Why Long-Term Care Planning Needs to Happen Before a Crisis

4. Get supplemental health insurance

Supplemental health insurance, such as critical illness insurance or hospital insurance, complements your major medical insurance to help protect you and your family from costs associated with serious illness or hospitalization. These policies pay benefits directly to you, so you can focus on your recovery and not your finances.

5. Purchase Medicare Supplement insurance

If you have Original Medicare, Medicare Supplement insurance, also known as Medigap, can help you pay for out-of-pocket health care expenses that Medicare doesn’t cover, such as deductibles, coinsurance, copayments or outpatient services.

6. Ask questions and get estimates for planned care

If you know you have a medical procedure coming up, ask your doctor for a treatment plan and ask your insurance questions about your coverage. Ensure all the doctors and specialists you’ll see are in-network and find out if anything needs to be preauthorized. Ask for cost estimates so you can be prepared for your share of the bills.

7. Know how to read medical bills and negotiate medical expenses

Getting savvy about the medical system may help you reduce your out-of-pocket costs. Learn how to read medical bills and find errors or overcharges. Any time you receive medical bills, ask for an itemized bill and look for red flags. You can also often negotiate with health care providers for lower fees or longer payment timeframes. If you don’t understand your charges or are having troubles with the billing department, get help from a hospital patient advocate.

Want more? Check out our blog, Budgeting for Medicare Costs: 6 Tips to Help

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