I redeemed my most recent 3000 points for Amazon gift cards. Easiest to do since it gets all added to one pot whereas with Walmart each gift card is separate and distinct.

I can't speak to specifically the SYW VGCs, but I have had no problems in using VGCs in general to pay medical bills not covered by insurance.
It also worked to pay the water+sewer bill although I got charged 2.95% fee, but I am ahead still by 2.05%