Self-Pay Versus Insurance
When it comes to purchasing your compression garments and bandaging supplies, one of the first questions that may come to mind is whether “these items are covered by my insurance?” However, while this is a legitimate question to ask, another follow up question should be, “if I have insurance and the items I need are covered, why wouldn’t I use it to help pay for my purchase?” This is where the answer gets a little more complicated and you will need to dig a little deeper to find out what the best answer to your questions truly is.
Are the items that I want to purchase covered by my insurance?
Medicare
For compression bandaging supplies and compression garments which are used to treat lymphedema, Medicare now helps pay for lymphedema products if certain conditions are met. First of all, you must have Medicare insurance to qualify for coverage. Secondly, you must go through several specific steps in order for your items to be covered. Finally, you still have to meet the annual Medicare deductible and co-payment for your pruchases. Even after navigating all ot these hurdles, you have to find a Medicare Enrolled provider who will be able to sell you the products that you are looking to purchase.
Private Health Insurance
If you have private health insurance, you may still be eligible for coverage of your compression products, but the coverage and amount depends on your particular plan. Even with insurance coverage, you will also likely have to cover a co-payment for each purchase and meet an out-of-pocket deductible under the terms of your plan. Finally, you will still have to find an in-network provider who accepts your particular insurance.
I have insurance and the items I need are covered, so why wouldn’t I use it to help pay for my purchase?
Although it may sound silly to ask this question, if you step back and look at the possible answers, you find that it may actually make sense to pay for your medical items yourself as a self-pay patient, rather than by submitting a claim through your insurance plan.
Self-Pay and Self-Pay Patients
"Self-pay" patient refers to those who pay the bill for medical goods and services directly from their own pockets. They do so either because they lack insurance coverage or consciously opt not to use their health insurance.
This group of self-pay patients may include those individuals who are not part of any particular plan, coverage, or Federal health care program (collectively known as uninsured patients), as well as those who may have insurance, but their plans have high-deductibles or co-payments, or who are seeking goods and services that fall outside the scope of their insurance coverage.
To obtain the medical goods and services that they need, these patients “self-pay” for the items or services that they need. They can simply pay out-of-pocket or utilize pre-tax funds using an FSA or HSA account for covered products, thereby obtaining tax-benefit savings on the self-payment amount.
Self-Pay vs Insurance - Is Self-Pay Cheaper than Insurance?
The answer to this question all depends on your particular circumstances – what it is you are purchasing, who you will be buying from and the coverage terms and conditions of your particular insurance plan.
Typically, goods and service providers charge at a lower rate when dealing with self-pay patients, rather than billing through their insurance! This simple fact is oftentimes overlooked or not known by health care patients, and they may end up paying more for their goods or services if they have an insurance plan with a high deductible or co-payment. So it is critical to understand the costs involved when using your health insurance or simply self-paying for those same goods or services.
Here are some common examples of when it may make sense to self-pay instead of using your insurance:
- 1. When the deductible year for your plan is almost over and you are a long way from meeting it.
This is one of the primary reasons to opt-out of using your health insurance plan. Deductibles often reset annually, so it may make sense to self-pay if you need to purchase a compression garment or bandaging supplies towards the end of the year, and especially if you are far from hitting your deductible. The cost of your products under an insurance claim will likely be substantially higher than if self-paid, and you in turn will be paying more for your compression supplies with insurance if your annual deductible has not been met.
Furthermore, regardless of the time of year, if you are facing a large deductible you still may want to consider paying for your items out-of-pocket. Self-paying for your products rather than having them processed through your insurance company could actually save you money since the cost of your items will likely be lower than if purchased with insurance, where you would have to cover the higher cost under your deductible. This is especially true if you only need a few items which won’t exceed the co-pay or deductible amount.
2. If you see an out-of-network provider, or one who does not accept any insurance
If you are faced with one of these circumstances, you may still be able to self-pay with the out-of-network provider to get the lower cash payment price, and then submit your claim directly with your insurance company. By doing this, your self-pay price may in fact be lower than your co-payment amount, and you can still use the purchase to apply towards the annual deductible.
3. When you can find a better cash price for your compression garments and supplies.
It is crucial to find out how much your deductible and out-of-pocket costs are if you use insurance. Compare that cost to what you would have to pay if you purchased the compression garment directly from a provider as a self-pay customer. Make sure you consider any available discounts offered by the cash-pay provider as well. This will help you see a clear difference between self-pay vs. your insurance covered expenditure.
Paying cash may be less expensive than processing the claim through the insurance provider. However, keep in mind that the money you spend out of pocket won’t count toward your deductible unless you are able to file a claim directly with your insurance company.
4. When you need to get your health care items quickly
Consider the time it may require for insurance approval compared to purchasing the garment directly. This is especially important when you have to get a pre-approval from your insurance before ordering your compression garment, or when you are in a hurry.
5. If you want to purchase an item that is not covered by insurance.
You should check with your insurance company to determine if the garment or goods you want to purchase are covered under your plan. If you purchase an item that ultimately is not covered by insurance, you may end up paying a significantly higher amount than you would have had you purchased it as a self-pay customer.
A final caveat:
The examples above are only examples. Decisions like this are personal in nature. We generally don’t recommend that people "not" use their insurance coverage to avoid paying toward their deductible, but we recognize there are occasions when it may make financial sense to simply self-pay. The fact is that you never know when someone serious may happen. If it does, you’ll be glad for every dollar that you’ve already contributed toward your deductible already.