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The Perils of GoFundMe (Part 1)

In this week’s blog post, I write about a particular solution – or really attempted solution – to the financial burden caused by a catastrophic illness or accident.  A family member calls concerning a loved one who has suffered a serious illness or accident, one that will result in needing extensive custodial care.  

As readers of this blog know, custodial care is quite expensive, whether in a facility or at home.  On average the cost is $13,000 to $15,000 per month and in some cases much more than that.  This type of cost is tough for a majority of Americans to cover for any extended period of time but that’s what usually is needed.  Recovery to the point of being able to live independently is not achievable in most of these instances.

As I have discussed many times, the problem is particularly acute for younger individuals.  That’s because they have not accumulated as much savings that can be applied towards care and are less likely to have even considered – let alone purchased – long term care insurance.  They also tend to have been working  to support spouses and young children.  A major source of income may be gone.

Medicaid becomes the obvious solution.  When I explain how Medicaid works and how applicants must document money going into and out of their accounts sometimes the issue of fund raising by a crowd funding method – usually GoFundMe – comes up.

Attempts are made by family members to raise money to help pay the costs of care and other mounting bills.  People rarely raise enough money to meet these costs but they do create problems when it comes time to apply for Medicaid.  I’ll explain more next week.