There are certain considerations when you are choosing health insurance is a plan’s out-of-pocket costs. These are the healthcare expenses that you pay yourself, i.e. out of your own pocket.
Out-of-pocket expenses are paid in addition to your monthly premium for health insurance. In order to minimize your healthcare costs, you need to look at your total annual spending for healthcare which includes not just your monthly premiums but also all the money you pay towards deductibles, copayments, coinsurance, and other out-of-pocket expenses.
As more and more Americans age in place, or remain living at home instead of moving into skilled nursing homes or assisted living residences, there has been an increased need for seniors to purchase durable medical equipment – DME. Every year, approximately $50 Billion is spent on durable medical equipment in America, wherein 25% percent of which is paid for directly out-of-the-pocket of consumers.
It is important to find other financial assistance programs and minimize their out-of-pocket spending on DME.
Before we go with the discussion, it is important to know what we consider as DME
Durable Medical Equipment (DME) as well as the terms, Home Medical Equipment (HME) and home healthcare equipment are used interchangeably. They refer to re-usable, long-lasting, medical equipment for use in the home that helps individuals to function on a daily basis. This includes mechanical items such as wheelchairs, walkers, commodes and handrails, and electrical items like a hospital bed, scooters, blood and glucose monitors, ventilators, and nebulizers.
Most durable or home medical equipment can be purchased without a prescription, with oxygen being the notable exception. However, a prescription is extremely valuable in helping to get insurance to pay for an item. As an alternative to a prescription, individuals can prepare a Justification Statement of Medical Necessity which describes the condition, the need, and why a specific brand and model item are necessary.
Financial Assistance and Payment Options
Usually, for any single item of durable medical equipment, there are multiple sources of payment. For example, Medicare will contribute, Medicare supplemental insurance may also help and an individual may pay a portion out-of-pocket as well. To minimize out-of-pocket costs, it is helpful to be aware of all the possible sources of funds that may be available to the elderly or disabled.
Medicare or other private health insurance covers the majority of spending on durable and home medical equipment. However, most insurance programs have co-pay requirements.
Fortunately, most policies consider the cost of medically necessary, durable or home medical equipment to be covered long term care expenses. Existing policyholders should check with their insurance providers to determine if durable medical equipment is covered. Purchasers of new long-term care insurance policies should make certain DME is an allowable expense.
When insurance refuses to pay for durable or home medical equipment, one has 3 options. They can appeal the claim, sue their insurance company, or purchase the DME out-of-pocket.
To appeal a denied claim, one’s insurance will have a fairly straight-forward process. However, unless there was a filing error, an appealed claim without additional, stronger justification will usually be denied. One may need to re-visit with their doctor or receive medical justification from an additional medical professional, as well as take the time to prepare a strong Justification Statement.
Out-of-Pocket or Private Pay
The unfortunate reality is that there are occasions when individuals are forced to pay out-of-pocket for their durable or home medical equipment. The good news is when one must spend their own money, there are options that can help them save a considerable amount.
Purchasing durable medical equipment online enables individuals to avoid the difficulty of transporting bulky or heavy equipment as most websites will provide free shipping. Another option is purchasing equipment used. There are pros and cons but used equipment can offer considerable savings; read our guide to purchasing used durable medical equipment. Renting equipment is another option, read our guide to renting durable or home medical equipment.
FAQs
1. What are out-of-pocket costs in health insurance, and how do they affect my overall healthcare expenses?
Out-of-pocket costs are the expenses you pay directly, in addition to your health insurance premium, for healthcare services. These include deductibles, copayments, and coinsurance. It’s important to consider these costs when choosing health insurance, as they can significantly affect your total annual healthcare spending.
2. What is Durable Medical Equipment (DME), and do I need a prescription to purchase it?
Durable Medical Equipment (DME) refers to long-lasting, reusable medical devices used in the home, such as wheelchairs, walkers, and blood glucose monitors. Most DME can be purchased without a prescription, but having a prescription or a Justification Statement of Medical Necessity can help get insurance coverage for the equipment.
3. How can I minimize out-of-pocket expenses when purchasing DME?
To reduce out-of-pocket costs for DME, you can explore various financial assistance programs, ensure your insurance covers the necessary equipment, and consider using Medicare, supplemental insurance, or other funding sources. Additionally, purchasing used equipment or renting DME may offer cost savings.
4. Does Medicare cover the cost of Durable Medical Equipment (DME)?
Yes, Medicare often covers a portion of the cost of medically necessary DME. However, there may be co-pay requirements. It’s important to check with your Medicare plan or private insurance provider to understand what DME is covered and what portion of the cost you may need to pay out-of-pocket.
5. What should I do if my insurance denies coverage for Durable Medical Equipment?
If your insurance denies a claim for DME, you have three options: appeal the decision, sue the insurance company, or pay out-of-pocket. When appealing, you’ll need to provide additional medical justification, such as a stronger Justification Statement from your doctor or another medical professional.
