What Will You Pay For DME: Explaining Medicare Deductibles and Coinsurance

Key Takeaways

The Deductible: This is the initial amount you must pay for covered services each year before your insurance begins to pay its share.
The Coinsurance: After you’ve met your deductible, this is your portion of the cost for services, with Medicare paying the rest. For Part B, this is typically 20% for you and 80% for Medicare.
The Out-of-Pocket Maximum: This is the highest amount you will have to pay for covered services in a year. Once you reach this limit, your plan covers 100% of your costs for the rest of the year.
Medical Necessity: Medicare will only cover services or equipment that a doctor has prescribed and documented as necessary to diagnose or treat a particular health problem.

Understanding your health insurance can feel like trying to solve a puzzle. You hear words like “deductible” and “coinsurance,” and it’s not always clear how they fit together. The good news is, once you know what they mean, it’s easier to understand what you’ll be expected to pay.

your healthcare costs and Coverage happen in a few Steps.

The Deductible: This is the first amount you have to pay for covered medical services each year before your insurance starts to help. For example, if your deductible is $240, you would pay the full cost of your first few doctor’s visits or medical supplies until you have paid that $240. For example if the first thing you use your insurance for is say for a manual wheelchair and it hypothetically costs $240 then you would pay the full $240 and your deductible for the entire rest of the year. Once you’ve paid that amount, you’ve “met your deductible” for the year. For 2025 the Medicare Part B Annual Deductible is $257
The Coinsurance: Once you’ve met your deductible, you enter the coinsurance phase. This is your share of the costs for services after your deductible is met. For Medicare Part B, you are typically responsible for 20% of the cost, while Medicare pays the remaining 80%. For example, if a medical supply item costs $100 AFTER your deductible is met, you would pay $20, and Medicare would pay $80.
The Out-of-Pocket Maximum: This is the most important number to know. It’s the total cap on how much you will have to pay for covered services in one year. Once you reach this limit, your plan will cover 100% of your covered costs for the rest of the year. All the money you paid toward your deductible and coinsurance counts toward this maximum. However, your monthly premium payments usually do not.

One more key term: Medical Necessity

This is the most important rule for Medicare coverage. Medicare will only cover services or equipment that are “medically necessary”. This simply means that a doctor has prescribed the service or equipment and documented your need for said item because it is needed to diagnose or treat a health problem.