As frustration with America’s healthcare system grows, more people are looking for new ways to manage their medical expenses. One of the most talked-about alternatives is CrowdHealth, a startup that’s trying to flip the traditional insurance model on its head. Instead of paying a large company to decide which medical costs it will cover, CrowdHealth invites members to support each other directly through a crowdfunding model. It’s a bold idea that’s attracting attention, and raising important questions about the future of healthcare.
The Birth of a New Model
CrowdHealth was founded in 2021 by Andy Schoonover, a former healthcare executive who became disillusioned with traditional insurance after a personal experience. When his young daughter needed ear tubes, a simple and medically necessary procedure, his insurer refused to pay the $8,000 bill. This was despite the fact that he was already paying $1,200 a month for family insurance coverage. “I said to them, ‘Look, if you’re not willing to pay my bills, I won’t pay your bill,’” Schoonover recalled. He dropped his insurance, started paying doctors directly in cash, and began thinking about a better way to handle major health costs.
That thinking led to the creation of CrowdHealth, which Schoonover describes as “a completely different way to pay for healthcare.” He says the platform is designed to “treat people like real people, like extensions to our family,” instead of forcing them to deal with “cold, oftentimes unreliable” insurance companies.
How CrowdHealth Works
CrowdHealth is not health insurance. It’s a community-based platform that allows members to fund each other’s medical bills. Every month, members pay a $55 administrative fee, called an “Advocacy Fee,” which gives them access to the platform, along with personal support from Care Advocates. These advocates help members find doctors, negotiate bills, and make healthcare decisions.
In addition to the monthly fee, members agree to contribute to the medical expenses of other members when needed. These contributions are capped depending on age and family size. A single adult under age 55 can expect to pay no more than $140 per month, while a family of four pays a maximum of $420. According to CrowdHealth, “members assist other members with their health care expenses,” and all of this is managed through the platform, which handles money transfers from contributors to recipients.
When a member has a medical expense, they’re encouraged to tell providers they are paying in cash, ask for a discount, and then submit the receipts to CrowdHealth. If the expense meets the platform’s guidelines, it is shared with the rest of the community. Contributions are voluntary, but those who don’t contribute risk damaging their “generosity score,” which affects whether others will contribute to their expenses in the future.
Real People, Real Results
For many members, CrowdHealth offers both financial relief and a sense of purpose. Geoff Perlman, a tech CEO from Austin, Texas, joined the platform in 2022. When his 20-year-old son broke his arm, the cost of care was covered by contributions from strangers in the CrowdHealth community. “You have a feeling you’re part of a community and you’re looking out for them,” Perlman said. “It feels like the money I am paying is helping other people.”
Before joining CrowdHealth, Perlman had tried other health-sharing models, including Liberty HealthShare, which covered his wife’s $1.2 million breast cancer treatment after negotiating the cost down to $217,000. But when Liberty raised its prices, he looked for alternatives and found CrowdHealth. He now pays about $226 per month for membership, plus $185 to $386 in monthly contributions toward others’ care. Compared to the $2,000 per month he used to pay for insurance, he says, “My payments have gone down by about one-third since I signed up.”
Others echo his experience. Brooks Lockett, a self-employed marketing consultant, was paying $450 a month for traditional health insurance and still received surprise bills. “The system seemed tailored for large corporations with the capacity to negotiate better rates, leaving freelancers and self-employed people like me at a disadvantage,” he explained.
Lockett tested CrowdHealth by keeping his insurance and trying both systems. When he needed a knee aspiration after a rock climbing injury, he used CrowdHealth instead of insurance. Though initially quoted $800, he paid just over $300 thanks to a cash-pay discount. “Doctors gave me fair prices without the red tape,” he said. “It felt like it brought back their humanity.”
The Drawbacks and Limitations
While CrowdHealth has won over many members, it’s not for everyone. The company has strict eligibility requirements: it does not accept smokers, men who weigh over 260 pounds, women over 220 pounds, or anyone over the age of 65. It also doesn’t cover certain medical services like acupuncture, chiropractic care, fertility treatments, long-term prescriptions, or procedures related to preexisting conditions during a new member’s first nine months.
There are also limits to how much members can rely on the system. CrowdHealth does not guarantee that every claim will be paid. Because the platform isn’t regulated like traditional insurance, there’s no state authority to turn to if a claim is denied. This makes the system riskier, especially for people with ongoing medical needs. Michelle Long, a senior policy expert at KFF, warned, “You just can’t anticipate everything that will happen.”
Another concern is sustainability. Larry Levitt, Executive Vice President for Health Policy at KFF, pointed out that “ventures like this work until they don’t.” With only a few thousand members, a small number of large claims could potentially overwhelm the system. And while CrowdHealth promotes its success in lowering costs through cash negotiations, some experts question whether those discounts are as deep and consistent as the company claims. Katherine Hempstead, a senior policy advisor at the Robert Wood Johnson Foundation, said, “You can get cash discounts on healthcare services, but I’m not sure you can do it at the levels CrowdHealth claims.”
A Revolutionary Idea for the Right People
CrowdHealth appeals most to people who are young, healthy, and willing to take an active role in managing their healthcare. Kyle Ward, a Texas resident, went without health insurance for 10 years because he didn’t think it was worth the cost. Even with a $44,000 salary, he faced a $300 monthly premium and a $7,000 deductible through the ACA marketplace. Instead, he chose to invest that money and pay cash for care. “Traditional health insurance is not working,” Ward said. “Maybe I’ve bought into the sales pitch, but CrowdHealth makes sense to me financially and morally.”
When Ward needed frequent colonoscopies for a preexisting condition, he knew CrowdHealth wouldn’t cover them. Still, the platform helped him find a provider who charged just $950 for the procedure, far less than he would have paid through insurance.
CrowdHealth also has the support of people interested in financial innovation. Schoonover often appears on podcasts focused on Bitcoin and cryptocurrency. The company even lets members invest part of their monthly payments into Bitcoin through a partnership with Swan Bitcoin, launched in October 2022. This has helped CrowdHealth find fans among people who are already skeptical of large institutions.
Is This the Future of Healthcare?
CrowdHealth’s peer-to-peer model may remind some of the way Amish communities handle medical expenses. In those groups, individuals cover a portion of their own bills, and the rest is funded by friends and neighbors. But that model works in part because of tight community ties and shared values. CrowdHealth is trying to recreate that spirit on a national scale among strangers.
Whether that’s sustainable in the long term remains to be seen. CrowdHealth is still a small player, especially when compared to large religious health-sharing ministries, which together serve hundreds of thousands of people. However, unlike those ministries, CrowdHealth has no religious affiliation and offers a more modern, tech-enabled experience. Schoonover hopes to grow the community to 100,000 members within three years.
“We’ve seen real evidence that, once people are responsible for their own bills, their behavior changes,” Schoonover said. “You get healthier. The bills come down.” He believes that when patients deal directly with doctors, without insurance companies in the middle, everyone benefits.
A Risky but Promising Alternative
CrowdHealth won’t be the right choice for everyone. People with chronic conditions, those who prefer guaranteed coverage, or those who aren’t comfortable negotiating prices may want to stick with traditional insurance or explore ACA marketplace plans, many of which are available at little or no cost thanks to government subsidies.
But for people willing to take more responsibility for their healthcare, and who are comfortable with some uncertainty, CrowdHealth offers a new kind of safety net. As Perlman, the Austin CEO, put it: “It feels like the money I am paying is helping other people.” For him, and for a growing number of others, that sense of connection may be worth more than a traditional insurance card.
