Humans are hardwired with a survival instinct, which explains the advances in medicine and the creative ways people have found to pay for their medical care.
In the aftermath of the Boston Marathon bombing on April 15, which claimed three lives and injured 264, according to the Boston Public Health Commission, many patients and their loved ones quickly realized that their challenges were just beginning. Some people were discovering that the price of a prosthetic arm or leg can range from $5,000 to $50,000, according to Disabled-World.com. In 2012, the International Federation of Health Plans reported that the average cost of a single day in a hospital in the U.S. was $4,287.
High hospital bills are a crisis for people throughout the country, many who have serious injuries or health problems away from the media limelight. One is Erin Taylor, an Orlando, Fla., resident who was born with cystic fibrosis and last year needed to raise $30,000 for a double lung transplant.
"The costs associated with transplants are astronomical," says Taylor, who was already $10,000 in debt to hospital clinics and pharmacies before her friends and family started to raise money for her operation. "In terms of raising money, I, personally, did very little," Taylor admits. "I always felt very uncomfortable asking people for money. Like my problems were any worse than someone else's? It didn't sit well with me."
But it had to be done, and that's often how it goes, with friends and family taking the lead in fundraising, in part because someone seriously ill can't do it themselves. So if you ever find yourself in the unenviable position of having to ask friends and family for money to pay for your own out-of-control hospital bills or a loved one's, here are some things you need to know.
The tax issue. As you can imagine, if you're going to embark on a serious effort to raise money for a loved one's medical bills, consult a tax professional.
What's the complication? For starters, "a person can receive a gift each year from another person up to a point of $14,000 in 2013," says Chip Manning, director of the Babson Center for Global Commerce at the University of the South in Sewanee, Tenn. "Anything above that can have a tax effect on the grantor and possibly recipient," Manning says.
Debbie Atuk is wrestling with that right now. The Brooklyn resident has been raising money for her cousin's husband, Greg Dixon, a 39-year-old former gold miner in Fairbanks, Ala., who was diagnosed with Stage IV colorectal cancer late last year. He didn't have health insurance, however, and is now undergoing extensive chemotherapy and radiation in Katy, Texas. The couple has three kids under age 10.
Atuk had the money raised—approximately $30,000 from a variety of resources—go directly into her bank account before she gave it to the Dixons, and she's now concerned she might be saddled with the taxes. If she had set it up so the money went directly to the Dixons' bank, they at least could have taken the taxes out of the money they were receiving.
"It's a delicate issue," says Atuk, who initially thought about discussing it with the couple but didn't. "When your relative has been given a 50 percent chance of surviving, it feels awful to say, 'Can I bother you for your bank account number?'"
Meanwhile, unless you've set up a nonprofit to accept contributions, people who give you money to give to someone else can't make a tax-deductible donation.
Consider crowdfunding. Sites like GoFundMe.com and GiveForward.com, which have both been utilized by victims of the Boston Marathon bombing, allow people to mobilize by collecting money and sharing the person's story in a meaningful way. And while so-called "crowdfunding" sites have a ton of success stories in raising money for worthy causes, it's important to recognize that these nonprofit sites have costs of their own and take a percentage of what is collected (GiveForward.com takes 7 percent and GoFundMe.com takes 5 percent).
There are also crowdfunding sites that raise money for a specific medical purpose. For instance, HelpHopeLive.org helps individuals and families raise money for uninsured medical expenses related to transplantation, like organ and bone marrow, and catastrophes involving, say, an amputation or a spinal cord injury.
Atuk used Indiegogo.com, which takes 4 percent of what is collected, provided you hit your fundraising goal. If you don't hit that goal, you can either have all the money sent back to donors or you can keep the money, but instead of 4 percent, Indiegogo.com gets 9 percent, a plan designed to encourage fundraisers to hit their targets. Atuk admits to not reading the fine print carefully enough, but that 9 percent left a bad taste in her mouth.
"We had a fire-drill mentality," says Atuk of her rush to raise as much money for Dixon as possible. She says if she could do it over, she would have tried to raise less than $30,000 on Indiegogo.com. It's difficult to discern the psychology of crowds, but a smaller amount, like $10,000, might have seemed more attainable to donors and thus encouraged them to give more—and she would have avoided losing 9 percent.
Raising money is more challenging than it looks. Yes, social media is amazing, but perhaps because there are so many people on Facebook and Twitter with their own agendas, or because consumers still feel cash-strapped in this post-recession economy, it takes some serious reaching out to get people to donate.
Atuk was able to raise more money with off-the-Internet events, like a live auction, versus online fundraising, and says if she does another round of requesting money, she is going to get a few people to help her. "Just like any other sales endeavor, the more people you contact, the more response you get. But also I'd just bring in other people to help avoid burn-out, and you can encourage each other. It would make it a lot easier," Atuk says.
Don't be afraid to ask for help. It's almost imperative, unless you have a lot of experience running nonprofits or fundraising. When her 27-year-old sister, Alison, was diagnosed last year with acute lymphoblastic leukemia, Meghan Pochebit of Los Angeles jumped into the fundraising fray. But Pochebit knew she'd need help, so she went to the Cancer Legal Resource Center in Los Angeles. "They were an incredible asset during this process and, free of charge, walked me and my family through the basics of fundraising, setting up a trust—we chose not to, but many people do go this route—with such compassion. They're a really amazing resource for questions about insurance as well."
Ultimately, Pochebit used GiveForward.com to set up a page for her sister, and she raised a little under $50,000.
"She has health insurance," Pochebit says of her sister, "but the medical costs rapidly built up, from items needed for home care to consultations with specialists."
Be sure to say thanks. "It's a simple piece of advice, but so often overlooked," says Pochebit, who adds that it's not only the right thing to do, but might also help with fundraising. "I sent a personal thank you to every single person who donated, at least five days within their donation. If you can't do it alone, ask someone to help you. Building those personal relationships encouraged donors to spread the word and help fundraise, but more importantly, it created a network of support for Ali that our entire family relies on to this day."
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Taylor echoes Pochebit's advice. "Show your gratitude," Taylor says. "These people are taking money out of their pocket and giving it to you. They don't have to. It's not their responsibility, but they want to. So making sure you thank these people is huge."
Taylor says she tried to write personal thank-you notes to everyone who donated, but adds, "I know I missed people, and that bothers me. I used my blog and Facebook to thank everyone on multiple occasions, but that still doesn't seem like enough. When you are asking people to help you in the way I did—basically to help save my life—a few words on a blog or a status update on Facebook just seems grossly inadequate."