HME stands for Home Medical Equipment, and an “HME insurance plan” refers to the portion of your health insurance that covers medical equipment you use at home. This isn’t a standalone insurance policy you buy separately. It’s a benefit built into health plans like Medicare, Medicaid, and most private insurance that helps pay for things like wheelchairs, oxygen equipment, hospital beds, and blood sugar monitors. You’ll also see this category called Durable Medical Equipment (DME), which is the more common term used by Medicare and most insurers.
HME vs. DME: Same Concept, Different Names
The terms HME and DME are used almost interchangeably in the insurance world. DME is the official term Medicare and most insurers use, while HME is more common among equipment suppliers and retailers. Both refer to the same category of coverage: medical devices and equipment prescribed by a doctor for use in your home.
To qualify for coverage, equipment generally needs to meet five criteria. It must be durable enough to withstand repeated use, serve a medical purpose, be primarily useful to someone who is sick or injured, be appropriate for home use, and be expected to last at least three years. A standard bathroom scale wouldn’t qualify because it’s useful to healthy people too, but a hospital-style bed with adjustable positioning would.
What Equipment Is Typically Covered
The most commonly covered items fall into a few broad categories: mobility aids (wheelchairs, walkers, canes, scooters), respiratory equipment (oxygen tanks, CPAP machines, nebulizers), home hospital beds, blood sugar monitors and testing supplies for diabetes, and patient lifts. Prosthetics, orthotics, and certain medical supplies also fall under the broader umbrella, which Medicare formally calls DMEPOS (Durable Medical Equipment, Prosthetics, Orthotics, and Supplies).
Items that are primarily for comfort or convenience, like air conditioners or grab bars, are generally not covered even if a doctor recommends them. The key test is whether the equipment is medically necessary to treat or manage a diagnosed condition.
How Much You Pay Out of Pocket
Under Medicare Part B, you typically pay 20% of the approved amount for covered equipment after meeting your annual deductible. Medicare covers the remaining 80%. Private insurance plans vary, but most follow a similar coinsurance structure, and some may require a copay instead.
One important detail: Medicare and most insurers only cover equipment from approved, enrolled suppliers. If you buy from a supplier that isn’t enrolled in your plan’s network, you could end up paying the full cost yourself.
Renting vs. Buying Equipment
Not all equipment is purchased outright. Medicare requires that most items, including many manual and power wheelchairs, start as rentals. You pay 20% of the monthly rental fee, and Medicare covers the other 80%. After 13 months of renting, ownership transfers to you automatically at no additional cost.
Some items must be purchased from the start, particularly equipment that’s custom-fitted to your body. And for certain categories, like some power wheelchairs, items under $150, and certain infusion pumps, you get to choose whether to rent or buy. Renting makes sense when you expect to need the equipment temporarily, such as during recovery from surgery. Buying is often better for long-term conditions.
Getting Approved: The Prior Authorization Process
For higher-cost equipment like power wheelchairs, your insurer will require prior authorization before they agree to pay. This means your doctor and the equipment supplier need to submit specific documentation proving the equipment is medically necessary.
The paperwork typically includes a note from your doctor documenting a face-to-face examination, a written order specifying your diagnosis, a description of the equipment needed, and how long you’ll need it. For power wheelchairs specifically, the process is more involved. A licensed therapist (physical or occupational) must evaluate you and document why the specific wheelchair is necessary, and a certified assistive technology professional from the supplier must be directly involved in selecting the chair.
Your doctor’s face-to-face exam note must reach the supplier within 45 days of the exam or your discharge from a hospital or nursing facility. Missing that window can delay or derail your approval, so it’s worth following up to make sure the paperwork moves quickly.
Supplier Requirements Matter to You
Insurance plans don’t reimburse just any equipment seller. Medicare requires suppliers to obtain accreditation from a CMS-approved organization, which verifies the business meets federal quality standards through periodic unannounced inspections. Suppliers must also enroll in Medicare’s system and post a $50,000 surety bond per location.
This matters practically because if you order equipment from a non-accredited or non-enrolled supplier, your claim will be denied. Before placing an order, confirm that the supplier is enrolled in your specific insurance plan. For Medicare, you can verify this through Medicare’s online supplier directory.
How Pricing Works Right Now
Medicare has historically used a Competitive Bidding Program to set prices for common equipment, where suppliers in specific geographic areas bid for contracts. All contracts from the most recent round expired at the end of 2023, creating a temporary gap period that began January 1, 2024. During this gap, Medicare adjusts payment rates based on previous contract prices updated for inflation using the Consumer Price Index.
For you as a patient, this means pricing is relatively stable, but the specific amount Medicare approves for an item can vary depending on where you live. Your 20% coinsurance is always based on the Medicare-approved amount, not the supplier’s list price.
Private Insurance vs. Medicare Coverage
If you have private insurance through an employer or the marketplace, your HME/DME benefit will be outlined in your plan’s summary of benefits. Coverage varies more widely than Medicare. Some private plans cover a broader range of equipment but require higher cost-sharing. Others limit coverage to a narrower list of approved items or impose annual dollar caps on equipment spending.
Private plans also set their own rules about which suppliers you can use, whether prior authorization is needed, and whether rental or purchase is required. If you’re unsure what your plan covers, call the member services number on your insurance card and ask specifically about “durable medical equipment” benefits, since that’s the term most customer service representatives will recognize.