Bartering To Pay For Health Care

As the cost of health care and health insurance climbs and as the economy shows little signs of a fast rebound, old-fashioned bartering has seen brisk growth.

Health care bartering has risen dramatically since the recession began, as people lose their health insurance and consumer spending drops, said Allen Zimmelman, a spokesman for the Bellevue, Wash.-based trade exchange ITEX Corp. ITEX Corp. has seen its health care business rise 45 percent over the past year. The exchange, which has 24,000 members, now fosters about $1 million a month in health care bartering.

Legions of other barter-hungry consumers seeking the option of exchanging goods for medical or health care services are turning to Craigslist. According to sources, bartering posts on the free listing service have more than doubled over the past year as the recession took hold.

"For those individuals without health insurance, bartering can indeed be a viable option," states Jesse Slome, executive director of the American Association for Critical Illness Insurance. "You probably can't trade enough for a major health care cost but certainly for a tooth filling or physical exam." Many of those who barter, use it to augment their existing insurance protection or to trade for services that are not fully covered.

But bartering can be tricky, and not every health care provider will consider it. Some doctors are open to bartering directly with patients. Others do their trading through an exchange that allow people to trade goods and services with other exchange members typically for barter dollars. Dollars are used to pay the health care provider who also belongs to the exchange. Roughly 400 exchanges now exist throughout the United States. The Web site barternews.com offers state-by-state listings.

Tax experts note that bartering transactions must be reported to the Internal Revenue Service. The fair market value of property or services received should be included as income on tax returns. For details refer to the IRS website: http://www.irs.gov/taxtopics/tc420.html.