Socializing medicine through crowdfunding

Kickstarter-style fundraising for medical bills.
Two weeks after the Boston Marathon bombings, rescue efforts for the more than 260 victims have largely pivoted from providing critical medical attention to raising funds to pay the bills that are already piling up—for everything from hospital stays and prosthetics to groceries and everyday items for those unable to work.

And often, the help is coming not only from their friends and families but also from scores of strangers, sending donations directly to the injured through so-called crowdfunding sites like GoFundMe.com and GiveForward.com. On a page titled “Believe in Boston,” GoFundMe lists 38 fund-raising campaigns for the marathon victims, noting that more than 40,000 donors have contributed nearly $3 million since the bombings. Meanwhile GiveForward, a crowdfunding site for medical bills, raised $1 million for marathon victims in three days following the attack. A fund-raiser for Patrick Downes and Jessica Kensky, a couple who each lost a leg in the bombings, is GiveForward’s biggest ever, with more than $745,000 raised so far.

While the crowdfunding sites have raised a lot of money for victims of the Boston bombings, their primary purpose is to help with everyday problems, their founders say: To cover expenses for medical issues from broken arms to cancer—especially for people who do have health insurance. Indeed, GiveForward began as a general-purpose crowdfunding site, but in 2009 it switched its focus to “all the weird medical loopholes people can fall through,” says Desiree Vargas Wrigley, the site’s founder and CEO. She expects medical crowdfunding to become more popular as employers increasingly switch to higher deductible health plans in order to balance additional Affordable Care Act costs. Employees are now shouldering 37% of their health-care costs, including 15% more in out-of-pocket expenses than they did two years ago, according to a new survey by Towers Watson.

“Even with adequate health insurance, many victims of medical emergencies will find themselves with a long list of related expenses,” including lost wages during recovery and transportation to the doctor, on top of rent or mortgage payments and utility bills, says Brad Damphousse, CEO of GoFundMe.

GoFundMe’s most successful fund-raising campaign for Boston victims so far, which has attracted more than $730,000, is the one for Jeff Bauman, the man who lost both of his legs and appears in some of the attack’s most iconic and horrific images, pushed in a wheelchair by a man in a cowboy hat. Bauman is also credited with describing the older bombing suspect, Tamerlan Tsarnaev, to police, aiding the pursuit.

But the outpouring of support led many people to mistakenly believe that Bauman, a Costco employee, did not have health insurance to cover his extensive medical care. The misconception caused so much alarm that reports about Bauman being uninsured began trending on Twitter, where @CostcoToday, the official account for the company’s employee magazine, has been working overtime to correct them. Costco executives also confirmed to the Boston Globe that Baum is insured, saying “What is important is that he is covered and will be taken care of.”

Experts, however, say that Americans commonly underestimate the cost of severe medical problems, from traumatic injuries to diseases like cancer, beyond what health insurance covers. On GiveForward, for instance, 80% of fund-raisers are for people who actually have health insurance, says Wrigley. In the fist year of cancer treatment, an insured patient will spend $8,500 in out-of-pocket expenses—from special food to additional daycare, Wrigley says. (On Twitter, one person wondered whether there was a fund-raiser to help Bauman pay off his student loans.) And consumers will often pay hospital bills first while charging everything else on plastic, racking up credit-card debt, she adds. “It’s just expensive to be hurt or sick in this country,” Wrigley says. “No one ever expects insurance to cover their mortgage while going through the treatment.”

To pay for all those extra costs, consumers are increasingly turning to crowdfunding. Donations at GiveForward tripled to $20 million last year, and the site is on track to raise more than $75 million this year, Wrigley says. And while people can use GoFundMe for various personal causes from legal defense fees to summer camp tuition, medical fund-raisers are the most popular, accounting for at least 17% of donations, which grew 500% in 2012 and which GoFundMe CEO Damphousse expects to surpass $200 million this year.

Source: WS Journal – Market Watch – By Jen Wieczner

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