While healthcare barter is being used sporadically on a number of barter exchanges, MediBarter is planning to take healthcare barter mainstream.

According to MediBarter, there are specific types of health plans that have an opportunity to  conserve cash. Specifically, self-funded plans and level-funded health plans.

Self-funded Health Plans

 Many employers throughout the US use self-funded health plans, directly taking on the financial responsibility for the healthcare expenses of their employees. In these types of health plans, employers either pay claims as they are incurred, known as self-funding, or pay a flat monthly amount into a claims fund, known as level-funded. The claims and funds are managed by a Third Party Administrator (TPA), When an employee incurs healthcare claims, the employer pays their TPA through one of these mechanisms. Since these businesses are using their own capital to pay claims, barter can directly increase cash flow.

In a self-funded or level-funded health plan, if the healthcare expenses exceed a set limit, stop-loss insurance kicks in to protect the employer from additional bills. The premium for stop-loss insurance is a significant component of the cost for a self-funded or level-funded employer and when claims go up, so does the cost of stop-loss insurance. Paying claims with barter protects the health plan from triggering stop-loss insurance which will result in higher stop-loss premiums upon renewal.

Level-Funded Health Plans

While self-funded businesses can conserve cash by not spending it, level-funded businesses receive a refund from their plan TPA of any claims funds remaining in their claims account. This positions barter as tool for recouping cash. Since many employers are self-funded or level-funded, there is a market for assisting these businesses in conserving cash, recovering cash, and maintaining a financially viable health plan.

Using barter to conserve cash in a self-funded or level-funded plan, while also minimizing the use of stop-loss is a two factor approach for lowering healthcare costs for businesses.

MediBarter coordinates with level-funded and self-funded health plan TPAs, to identify opportunities to use trade as opposed to the plan’s cash reserves. If a business cannot remain self-funded or level-funded, the TPA will loose a client. This creates an incentive for TPAs to use MediBarter within their network of employer clients and, in particular, focus on accounts that may be jeopardized by rising claims.