Medical crowdfunding brings financial relief to people who struggle with costly medical expenses and cope with an illness or a serious disease in the family. Every year, millions of people with or without health insurance seek immediate ways for how to get rid of medical debt and pay their medical expenses and out-of-pocket bills, while trying to afford basic living needs.
With mounting medical expenses suddenly impacting a family budget, you can start to feel overwhelmed with caring for your sick loved one and for other family members, while working a job. You can lose income from taking time from work to care for someone, making matters worse. The problem is clear: you need to get rid of medical debt.
The billing cycles for medical bills and out-of-pocket costs can become burdensome and even threatening with financial consequences, concerning rent or mortgage bills and foreclosure, tuition, insurance premiums, prescriptions, further medical treatment, dental visits, and planned major purchases, like a car or a vacation. Making ends meet can suddenly require that you delay or sacrifice some key area of your family life in order to afford essential living needs.
The Insured and Uninsured are Vulnerable
Some facts spell out how medical expenses cause financial problems for millions of people every year:
One in every five American adults between 18-64 years old with health insurance say they had problems paying medical expenses in 2015, according to one study. And while insurance can protect people from costly medical bills, those with employer coverage or other insurance suffer similar consequences to the uninsured, once the financial strain begins. Among those facing problems with medical bills, almost identical shares of the insured (44 percent) and uninsured (45 percent) say the bills had a major impact on their families. So it’s clear that both the insured and the uninsured can face financial catastrophes due to medical-related expenses.
Facts About Medical Debt
- Bankruptcy – Medical expenses account for 62 percent of all bankruptcies in America. Of those who filed for bankruptcy due to medical expenses, 72 percent had some type of health insurance. Balances owed after insurance coverage combined with unexpected and costly out-of-pocket expenses can devastate a family budget, leaving few desirable options.
- The Uninsured – For families with low incomes or lack health or dental insurance, medical bills may have lower amounts, yet a bill of $500 or less presents a major problem for someone who is living paycheck to paycheck.
- Government Funded Health insurance Programs – Medicaid and Supplemental Security Income (SSI) have eligibility requirements and restrictions. Additional programs for the uninsured or low income vary by state. Medicare is a social insurance program funded by a payroll tax that provides health care coverage for people who are 65 and older.
- Affordable Care Act – Since The Affordable Care Act was enacted in 2010, an estimated 20 million more people now have health insurance today because of it, reducing the number of uninsured people. Still, there are 33 million Americans, or 10.4 percent of the population, who were uninsured in 2014. This number includes young adults, working adults, immigrants, low-income people in certain states where Medicaid hasn’t expanded or who were ineligible for it, and children.
Health Insurance Billing and Debt Collection
When you or a loved one becomes ill suddenly or needs immediate health care for any reason, bills quickly follow. The amounts and types of bills that you are responsible for – even after insurance coverage – can be startling. While health insurance may cover much of the medical care, it’s difficult to know exactly what will be your responsibility, how much it will cost, and why. Your portion of payments may be unaffordable or greatly impact your budget.
Short-term and Long-term Healthcare Needs and Expenses
Short-term episodes of illnesses can require surgeries, medications, and tests. Dental treatment, for example, could be a one-time visit with one expensive bill. An emergency room visit is also a one-time event, yet with multiple providers; alternatively, treating a disease can mean extensive treatment, involving different doctors and facilities over a longer time, such as cancer, heart disease, and diabetes, and therefore you have a longer billing period with more involved and lengthy treatment.
How the Medical Billing Process Works
The medical billing process works in a cycle, involving your health care provider submitting bills to your insurance company if you have health insurance. It can take days or months and begins with your office visit when your patient record includes a diagnosis and procedure codes. Once a bill goes to the insurance company, it processes the claims and decides whether to approve, deny, or reject the claims, giving reasons. Approved claims are reimbursed, typically for a certain percentage of the billed services. Other reductions to your bill occur with your co-pay, a deductible, or coinsurance. The doctors and medical specialists collect out-of-pocket expenses directly from you, the patient. Sometimes a health care provider will use a third party, called a medical billing service, for its invoicing, verification, and collections.
How Debt Collection Agencies Can Hurt Your Credit Score
A flurry of mail comes, bringing medical insurance statements and balances that can leave you questioning exactly what you owe and whether your insurance coverage completed assessing your claims. Eventually, you get a bill with a timeline to pay it, and if it goes unpaid, your healthcare provider will turn over your account to a collection agency. At this point, you run the risk of having the collection agency report your unpaid balance to various credit agencies that manage your credit score, and will lower it based on these medical debts. More than other unpaid debts, medical ones can seriously lower your score.
One thing you can do to protect your credit score is to try to solve your billing issues and questions with your health providers before your account is sent to collections on the payment deadline. Talk with your health providers and pay them directly – even partially – and talk about your remaining balance with them. Be aware that hospitals are quick to send unpaid and overdue accounts to collections. They prefer to receive your payment directly because the amount will be more than what a collection agency will pay them.
Avoid Debt Collection Harassment
Collection agencies want you to pay your medical debt to them as soon as possible. Medical debt is among their major debt categories of payments to recover. No other industry receives more complaints about harassment than debt collection agencies, according to the Federal Trade Commission. To protect yourself with consumer rights against harassment, consult the Fair Debt Collection Practices Act (FDCPA).
Inherited Medical Debt?
Sometimes money troubles come unexpectedly and at difficult times. It’s challenging when a loved one dies, like a parent or grandparent, and then to have to confront the worrisome financial position of that person. A death typically follows hospitalization or time spent in the emergency room or intensive care unit, with an aftermath of medical bills to pay. The cost of this level of care can be astronomical for many families.
What happens to medical debts when someone dies in your family? Generally speaking, the estate of the deceased is used to pay outstanding medical debts if there is enough money to cover them. If there is not enough money to cover them, then the medical debts usually don’t become the responsibility of other family members. Still It’s best to check the different state laws on medical debt for these payments after a death. Medicaid has its own set of rules on debts of the deceased, as well.
In addition, if you have co-signed a particular transaction that states you are personally responsible for these debts, or if you have a legal duty to be responsible for this person, for a dependent, for example, then you will be expected to deal with these payments.
Be aware that if you are a beneficiary in a will, the medical debts may have to be paid from the estate by liquidating some assets in it before anything is distributed to the heirs. So what you might have intended to inherit could get wiped out in this process of paying the outstanding medical debts.
Options to Pay Your Medical Bills
What are your options when you face a string of medical bills with due dates? A single medical problem can lead you down a spiral of complex financial restrictions with few solutions.
1. Compassionate Crowdfunding
Creating an online fundraiser to share your struggle to pay your medical expenses is an effective way to get funds immediately. It’s free, and it can be used in combination with other fundraiser events and activities. Online fundraising draws upon your social networks from different areas of your life, from school, college, work, sports, clubs, neighborhoods, or faith communities. Sharing your financial situation honestly so others can see what you are going through connects them to you. Compassionate crowdfunding means that you can reach out to others and discover that we all rely on each other for support at different times of our lives.
2. Bank Loan
The traditional go-to solution has been applying for a bank loan or a line of credit. Borrowing a sum of money to pay the medical bills transfers your debt to a creditor, to which you owe the sum with interest. Applying and qualifying for a loan can take time, maybe more time than you have when your living expenses become increasingly difficult to afford. While borrowing money seems like a solution, it will mean paying an interest rate on top of the total loan amount with your monthly schedule of other bills. This loan will tap into your already depleted income or savings, along with having to pay other out-of-pocket expenses. Losing time from work to care for someone can mean suffering a reduction in your income right now. A low credit score may prevent you from qualifying for a loan. Because collections are quick to report your medical debts to creditors, your loan application may be seen as risky if you are already having trouble keeping up with your bills. To qualify, you may require someone to co-sign with better credit than yours, like a family member or friend to get the loan. The co-signer would be legally responsible for repaying the loan, with you.
3. Borrow from a Friend
If you don’t qualify for a loan and cannot find a willing co-signer, you might try to borrow money personally from a friend or family member. Here again, you would arrange a mutually agreeable schedule for paying back the loan, with or without interest.
4. Negotiate Your Bills
Professional medical bill negotiators work on clients’ behalf to resolve billing issues or negotiate lower medical bills, often in exchange for a portion of your savings. This option may appeal to you if you don’t have the emotional or mental bandwidth to take on this project, but it’s not clear how much you would save. You could try to negotiate your own bill and ask for an itemized statement, question the costs, and request discounts, and log all your communications down to document the decisions.
How to Pay Medical Debt with Crowdfunding
Stop spending your savings and liquidating assets, and be confident about staying where you live. It’s important not to delay regular health appointments for your own wellbeing so you can care for others during a difficult time. Borrowing money and living paycheck to paycheck is not a good plan when even your basic living needs aren’t being met. Working one or more jobs and caring for a family and a sick loved one creates an unbearably stressful and ultimately unhappy life for all.
Take control of your life before your financial circumstances get out of hand. Instead of getting swept up in a storm of ongoing and overwhelming medical expenses that could lead to bankruptcy, consider free crowdfunding. It will provide you with daily payouts, emotional support, and kind words from your online communities, and perhaps most importantly, a sense of empowerment that comes only from asking for help. We all need help once in awhile. Crowdfunding fosters community and drives global grassroots philanthropy, where no one needs to suffer hardship alone.
YouCaring supports Compassionate Crowdfunding for personal and charitable causes. As a B Corporation company, YouCaring wants you to get every possible donation you can from your online fundraiser. That’s why it’s free for you to use.
Dan Saper, President of YouCaring, offers this promise: “We promise to show the world that no one has to face hardship alone. To foster compassion. To create a global giving community on a scale unseen in human history. To prove that everyone can be a philanthropist and make a difference – all it takes is a dollar and a kind word.”
YouCaring medical fundraisers total more than half of the 250,000 fundraisers on its website. When you create an online fundraiser, you are telling your story with words, pictures, and video, revealing the real difficulties you face, from health issues to the day-to-day financial burden and emotional pressures that you need help with. When you ask for help, you let people know who care about you. What you will get is compassion and financial support, and you will marvel at this outpouring from your friends, family, communities, and even total strangers.
“The kindness of complete strangers just blows you away.”
A fundraiser who reached his financial goal on YouCaring.
Raising funds through crowdfunding is something that works, and anyone can do it. To learn some fundraising tips we gleaned from talking with 30 successful medical fundraiser families on YouCaring, check out this case study that reveals what it’s like to jump in and start a fundraiser and then get relief and financial help quickly. You need to ask for it, and share your journey with others with updates, until you meet your goal so that they can stand by you and know you are all right. By sharing your struggle with others, you will see how others do care, and they will want to help you work through this difficult time. Here is another successful medical fundraiser.
“YouCaring has been a great tool and kind of a lifeline for a lot of people.The more candid people are on their fundraisers the more successful they are. Honestly, because If you sugarcoat things, people won’t be able to understand it. You want people to see what life is like through your eyes, so they can make an educated decision on if and how much they want to donate. Just be as human as possible, and in that way you’re much more relatable.”
Take care of yourself and those you love. Start your free fundraiser now.