Why Crowdfunding for Medical Expenses Doesn't Always Work

— -- When Alicia Wheatley of Tacoma, Washington, worried about how to to pay for the ongoing medical care her toddler needs to treat an eye disorder, she found help in an unlikely place: Online crowdfunding.

Wheatley’s daughter Chayla is just 2 years old and suffers from amblyopia in her right eye. The disorder causes decreased vision, and Chayla needs multiple eye surgeries to correct it or she could risk going blind in the eye.

Chayla wears an eye patch to strengthen the muscles in her eye, but it’s only a temporary solution.

Trying to pay for Chayla’s surgeries is putting the Wheatleys in a position they never imagined.

“We’re done everything right to get where we are, and we still can’t afford good healthcare,” Wheatley said. “It breaks my heart.”

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Her husband Ray Wheatley's military job was cut due to a troop draw down and the family’s military health insurance, which did cover some of Chayla's medical care, will run out in a matter of months. His new civilian job pays less and what his future insurance will cover is uncertain.

So friends and family recommended they going online and crowd-fund to pay Chayla’s treatment, using the same sort of online fundraisers, such as GoFundMe, Kickstarter, GiveForward and YouCaring.com, that inventors, entrepreneurs and struggling filmmakers use to launch their projects.

So Alicia Wheatley launched an online campaign through a website called GiveForward, setting a fundraising goal of $10,000 and hoped for the best.

GiveForward has about 14,000 medical fundraisers, most, the company says, are people who actually have health insurance but still need help paying for treatments that aren't covered. Medical crowdfunding has been successful for many families, and an estimated $2.5 billion was raised in 2012, according to a report by research firm Massolution.

There have been some instances of crowdfunding fraud, where people have pretended to be sick or misuse the money, but GiveForward said those instances are rare. The company said they have stringent security systems in place to make sure those asking for money are legit. But with federal regulation still evolving, experts caution that consumers should do their research before donating.

Crowdfunding has worked for other families in the past. Patrick and Kristin Wilkinson of San Francisco raised over $20,000 on GiveForward so that their 4-month-old son Phoenix could get a bone marrow transplant.

“I think the hardest part is feeling helpless,” Kristin Wilkinson said. “As parents you’re supposed to protect your child, and in that situation you can’t.”

Phoenix was born with Severe Combined Immune Deficiency (SCID), a rare genetic disorder.

“Going undiagnosed, if a child has SCID, it’s fatal,” Wilkinson said. “As soon as they get an infection… their bodies can’t fight it.”

Wilkinson works for Airbnb, and her son’s GiveForward page was sent to the entire company and it took off from there, raising $20,000 in just 24 hours and over $50,000 total over 10 months.

Like Alicia Wheatley, the Wilkinsons have health insurance through Kristen's job at Airbnb, but because Phoenix’s care so time-consuming, Kristin and Patrick weren’t able to work for months, so they said the crowdfunding money was much needed.

“It just gives you faith in humanity again,” Kirstin Wilkinson said. “It was really unbelievable.”