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'Troubling and shocking': Americans are increasingly crowdfunding medical costs

Adriana Belmonte
Finance Editor

This post has been updated.

Crowdfunding medical costs has become a necessary way for some Americans to avoid falling into serious debt.

According to the GoFundMe CEO Rob Solomon, 1 in 3 GoFundMe crowdfunding campaigns aims to cover the costs of medical-related financing.* The website is the world’s largest online crowdsourced fundraising platform, having raised more than $5 billion from 50 million donations in its eight years of existence.

*Update: GoFundMe notes that there are a variety of use cases, including medical bills, travel, covering lost wages for the patient or caregiver, research, accommodations for families, and other costs associated with receiving care or recovering from treatment.

The company declined to comment on the total number of medical-related campaigns. Currently, there are hundreds on the site. (The page froze after loading about 750 open entries).

Gerald Kominski, a Senior Fellow at UCLA Center for Health Policy Research, told Yahoo Finance that the situation is “troubling and shocking” — even if it’s somewhat understandable at this point.

(Photo: GoFundMe)

“Despite the progress that’s been made in the last five years because of the Affordable Care Act (ACA), there are still almost 28 million people in the U.S. without [health] coverage,” Kominski said. “We are the only major industrial nation that doesn’t provide basic health insurance to all of its citizens. In some sense, failure is on Congress and its inability to find a way for everyone to be insured.”

‘We can do better as a nation’

The U.S. spends more on health care than any other country. It also ranks last in overall quality among the most developed nations.

Tom Kise, the director of public affairs for the United States of Care, a non-profit and non-partisan organization, believes that people shouldn’t have to resort to crowdfunding.

“The role of our family and friends isn’t supposed to be to help us pay for our medical bills,” Kise told Yahoo Finance. “We can do better as a nation.”

GoFundMe, for its part, does not want to be a substitute for a proper health care system.

“Despite the progress made with the Affordable Care Act, there are ever-widening gaps in coverage for treatment, prescriptions, and related health care costs, even for patients with insurance,” the company said in a statement to Yahoo Finance. “However, while GoFundMe can provide timely, critical help to people facing health care crises, we do not aim to be a substitute social safety net.”

Kominski, speaking to why the U.S. government doesn’t do more to help, lamented that “no one in the administration currently thinks this is an important problem.”

President Trump gathers with Vice President Mike Pence and Congressional Republicans after the House of Representatives approved the American Healthcare Act, to repeal major parts of Obamacare and replace it with the Republican healthcare plan, in Washington, U.S., May 4, 2017. REUTERS/Carlos Barria

Furthermore, as detailed in the video above, about seven million people are set to see their health care costs go up considerably next year.

“This is people who are not covered under an employer, so they buy insurance on the individual market,” Rick Newman explained. “And they make too much to qualify for subsidies under the ACA. …

“So three things are happening that Trump has put into place that are actually going to make this worse for this group of people. First, the individual mandate goes away beginning in 2019. And then Trump has proposed that two different types of what are called sort of skinny or temporary plans, people are allowed to buy these. These are much cheaper, but they don’t cover a lot.”

‘It’s an unsatisfactory option’

As for how to fix the U.S. health care system, there is a range of opinions.

“If one person in America, the richest country in the history of the world, can’t get the medication or health care they need because they can’t afford it, that is too many,” Senator Bernie Sanders (D-VT) told Yahoo Finance in a statement. “And yet, millions of people right now are relying on the generosity of complete strangers online in order to afford health care. This international embarrassment has got to end. Our profit-driven health care system isn’t working. We must pass Medicare-for-all and join every other major country in guaranteeing health care for all as a right, not a privilege.”

Alternatively, Kise of United States of Care believes that states should lead the way.

“States have been the cauldron of democracy, where we can figure out what works and what doesn’t,” he said. “We need to look at policy at the state level to see what we can learn and bring the costs down. Each state knows what works best for them.”

(Credit: Go Health)

Kominski of UCLA, meanwhile, is somewhere in the middle.

“If we leave this to the states, we’ll never solve this problem,” he said. “It requires a national solution.”

Kominski noted there are currently 17 states, including Texas and Florida, that refuse to expand their Medicaid programs despite continual federal financing available.

“We can debate what the right solution is but, at a minimum, we should have a basic health benefit that everyone is entitled to,” he said. “It doesn’t necessarily have to be a Medicare-for-all proposal.”

In the meantime, is there an alternative to crowdfunding?

For many, the only other option is declaring bankruptcy. Medical bills had been a leading cause of personal bankruptcy before Obamacare was enacted and personal bankruptcies plummeted.

Nevertheless, crowdfunding for medical bills is still a necessity for many.

“It’s an unsatisfactory option, to say the least,” Kominski said. “It seems excessively harsh that we put people in that situation when we have the resources to protect people from these kinds of predicaments.”

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