Employees Turning to Crowdfunding for Health Costs — What It Means

On the heels of celebrities’ families crowdfunding for financial support following dire medical diagnoses, drawing attention in the process, new data sheds light on just how common raising funds for medical expenses is. 

One in 24 workers (4.2%) said they have personally used GoFundMe or similar crowdfunding platforms to pay for medical bills, while 10% know someone who has, according to a survey of 500 U.S. employees at companies with 150–2,500 employees from health benefits technology company SureCo in Santa Ana, Calif. 

The figures suggest that crowdfunding has moved into the mainstream of how people cope with health care costs in today’s system, said SureCo CEO Matthew Kim. “When employees are comfortable acknowledging it in surveys, it often means the experience is already visible within their social and professional circles,” he said. “This says a lot about how the modern-day health care system functions.” 

Crowdfunding was once associated with rare or extreme situations, but “now increasingly reflects routine financial strain tied to deductibles, treatment costs, prescription drugs, lost wages, and the indirect expenses that come with chronic and/or serious illness,” Kim said. 

The strategy is making waves even for those with medical insurance, indicating that there is a disconnect between employer coverage and additional health care expenses. 

“It signals that many households are still exposed to sudden financial shocks even when insurance is in place,” Kim said.  

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Crowdfunding Attention 

Attention on crowdfunding for medical expenses has grown as of late. 

Dawson’s Creek star James Van Der Beek died from colon cancer on Feb. 11, at age 48, but the news of a GoFundMe campaign for his family made just as many headlines. “Throughout his illness, the family faced not only emotional challenges but also significant financial strain as they did everything possible to support James and provide for his care,” the GoFundMe page reads. “The costs of James’s medical care and the extended fight against cancer have left the family out of funds.” 

Similarly, following the Feb. 19 death of actor Eric Dane from ALS, friends of the Grey’s Anatomy star also created a GoFundMe account to raise money for his family. 

“If [people with those] levels of visibility and resources still end up relying on GoFundMe, what does that mean for the average family?” said Harrison Newman, a New York City-based vice president and employee benefits consultant at Corporate Synergies, a benefits brokerage and consultancy firm. “Most people are walking around with what looks like ‘basic’ health insurance, but it’s not built for major medical events. Deductibles, coinsurance, specialty drugs, missed work — it all piles up much faster than people expect. It’s a reminder that having health insurance doesn’t necessarily mean being financially protected.” 

Crowdfunding is no longer an “unusual situation” when it comes to big medical events and diagnoses, Newman added. “Most benefits programs handle everyday health care needs well, but when something major happens, that’s where families see the cracks. Even with a solid medical plan, people can get buried by the financial ripple effects: missed work, travel to specialists, support needs, and everything else that life throws at you during a serious diagnosis.” 

Kim agreed, saying that the increased use of crowdfunding to fill those gaps raises “legitimate questions about how well the current system protects people during major health events.”  

“Coverage does not always translate into financial security once deductibles, coinsurance, and non-medical costs accumulate,” he said. 

Health Care Cost Anxiety 

Crowdfunding for medical expenses is further proof of health care cost pressures and affordability issues. The SureCo survey also found that 53.5% have taken “drastic” financial measures to pay for medical expenses even though they had health insurance, and 15% have borrowed from family or friends to cover medical bills. And nearly 4 in 10 employees have avoided or delayed medical care due to cost. 

Health care cost anxiety has been growing as costs rise, with data from Kaiser Family Foundation finding that paying for health care is currently Americans’ top financial worry. Two-thirds of Americans say they are very or somewhat worried about affording health care, outranking concerns about paying for groceries, utilities, or housing costs. 

Millions of Americans struggle to navigate coverage gaps, deductibles, and skyrocketing health care costs — with more than 31 million people borrowing an estimated $74 billion last year just to pay medical bills, according to Gallup figures.  

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Employers’ Role 

The findings underline the importance of better benefits education and helping employees understand their coverage, including any vulnerabilities that may exist, experts said. 

“Employers should view this as a signal that employees may not fully understand their exposure until a crisis occurs,” Kim said. “That puts a premium on clearer benefit education and on plan structures that reduce volatility for households facing serious illness.” 

It’s also an opportunity for employers to offer and tout additional and supplemental benefits — such as critical illness and hospital indemnity plans, as well as health savings accounts — or consider alternative funding approaches, such as an individual coverage health reimbursement arrangement.