How to Navigate AID Insurance Coverage
Key takeaways:
- AID systems can improve diabetes management, but navigating the complexities of insurance coverage can make accessing this life-changing technology a headache.
- Understanding whether your device is covered under durable medical equipment (DME) or pharmacy benefits and how Medicare vs. commercial insurance operates can help you choose the system and coverage that works the best for you.
- Manufacturers sometimes offer cost-saving programs, like flexible payment plans and upgrade discounts, that can help make AID systems more affordable.
Automated insulin delivery (AID) systems have taken diabetes management to a new level by combining insulin pumps and continuous glucose monitors (CGMs) with an algorithm that adjusts insulin delivery in real-time. These systems can reduce the burden of blood sugar management and improve long-term outcomes – but accessing them can be complex and expensive, especially when navigating insurance.
There are currently five major AID systems on the U.S. market:
- Tandem t:slim X2 and Mobi with Control-IQ+
- Medtronic MiniMed 780G
- Insulet Omnipod 5
- Beta Bionics iLet Bionic Pancreas
- Sequel’s twiist (expected to be available soon)
Each system comes with its own insurance implications, depending on how your insurer classifies it. Some insurers treat these devices as durable medical equipment (DME), requiring coordination with a medical equipment supplier. Others classify them under the pharmacy benefit, which means obtaining the AID from a pharmacy with potentially lower copays and fewer administrative hurdles but different documentation.
What’s covered can vary widely depending on whether you're using a tubed or patch pump, who the insurer is, and the benefit category (DME vs. pharmacy) the device falls under.
Despite the complex maze of insurance jargon, there are ways to make AID systems more affordable. The Association of Diabetes Care and Education Specialists (ADCES) insurance coverage tool, for example, can help you understand your specific coverage and find affordable options for your needs.
From understanding your insurance benefits to tapping into manufacturer support programs, many people find strategies to reduce out-of-pocket costs and successfully access the tools they need to make diabetes management easier.
DME vs pharmacy benefit
Before diving into insurance specifics, it helps to understand one of the most important (and confusing) distinctions in diabetes device coverage: Is your insulin pump or AID system billed as DME or through your pharmacy benefit?
Most insulin pumps, like the Tandem t:slim X2 and Medtronic 780G, are billed as DME. If your system falls into this category, your insurer will treat it like other long-term medical equipment hardware and require you to obtain the AID and supplies through a DME supplier rather than a pharmacy. DME typically involves a lengthier prior authorization process, a deductible, and coinsurance (depending on your plan). Coverage is often tied to specific criteria like frequent glucose monitoring and a documented history of diabetes management.
Systems like Omnipod 5 and more recently, the Beta Bionics iLet system (as well as the soon-to-be-available Sequel twiist system, potentially) are often covered through your pharmacy benefit, which means you get your pods or devices from a pharmacy, the same way you’d pick up your insulin. With pharmacy benefit, there’s often a predictable copay that may mean lower out-of-pocket costs, easier prescription refills, and fewer administrative hurdles.
Many people opt to get 90-day supplies of CGM and pump materials through their insurance’s preferred mail-order pharmacy, which is more likely to stock all of the supplies and may reduce co-pays. Asking your provider for a three-month supply and setting up autoshipping can help bring down costs and simplify the process of obtaining your AID supplies.
Knowing whether your device falls under DME or pharmacy benefits helps you prepare for the paperwork and understand your cost-sharing responsibilities (co-pays, deductibles, and coinsurance). It's also worth noting that some people with Medicare or certain employer plans may only have one type of benefit available for devices, which can affect which AID system you’re able to access.
Tubed vs patch pumps
When choosing an AID system, one key decision is whether to go with a tubed or patch pump. Both types deliver insulin automatically based on your glucose levels, but how they’re worn and what supplies they require can vary significantly
Tubed pumps, like the Tandem t:slim X2 and Mobi, Medtronic 780G, and Beta Bionics iLet, use a small tube to deliver insulin from the pump to a site on your body. You’ll need to regularly order infusion sets (tubing and cannula) and cartridges or reservoirs for insulin, typically changed every two to three days.
Patch pumps, like the Omnipod 5 and Sequel twiist, stick directly to the skin and deliver insulin without tubing. Each pod is worn for two to three days, and because everything is self-contained, the only supplies you usually need are the insulin and the pod itself.
Medicare coverage
Navigating Medicare coverage for AID systems can feel overwhelming, but understanding some basics can make the process much easier.
Medicare A, B, C’s
Medicare Part A covers hospital stays and inpatient care, so it generally doesn’t apply to AID systems. Instead, most coverage for AID devices and related supplies falls under Parts B and D, depending on the type of pump you use.
Medicare Part B covers FDA-approved tubed insulin pumps under DME, including the pump, infusion sets, and CGMs, as long as medical eligibility criteria are met.
Medicare may cover other pumps, including the Omnipod 5 and pods, under pharmacy or Part D. Any CGM, though, would be covered separately under Part B. Since not all Part D plans cover patch pumps, it’s essential to confirm coverage with your plan (or the pump manufacturer).
Part C (also known as Medicare Advantage) plans combine Parts A and B (and usually D) but follow different coverage rules depending on the insurer and if the device is under DME or pharmacy benefits. If you have Medicare Advantage, ask the pump manufacturer for help navigating your benefits.
It’s important to verify coverage before enrolling, and check which specific medical criteria you may need to meet in order to qualify.
Commercial insurance
If you have commercial insurance through an employer or a private plan, the coverage for your AID system will vary based on your specific policy, so it’s important to choose an insurance plan that fits your needs.
Most commercial insurers require prior authorization before covering an AID system. This means your healthcare provider needs to submit medical documentation proving that the pump and CGM are medically necessary.
Like Medicare, insurers often require proof that you have insulin-dependent diabetes and meet other medical criteria. This may include recent A1C results, documented history of insulin use, or evidence of frequent hypoglycemia.
Plans may limit how often you can get new pumps or supplies, so understanding your plan’s replacement policies is key. Keep an eye out for deductibles, copays, and coinsurance that can affect your overall costs.
Since your insurer may require you to order pumps and supplies through specific DME suppliers or preferred pharmacies, using out-of-network providers can lead to higher costs or denied claims.
Commercial insurance plans often change coverage details each year, so review your benefits during open enrollment to confirm what’s covered and how much you’ll pay. Checking the insurance provider’s explanation of benefits and working with your healthcare providers and insurance support teams can help you understand the necessary documentation for coverage, verify your benefits, and assist with prior authorization paperwork.
While insurance coverage significantly improves access to AID systems, managing out-of-pocket costs remains a top concern for many people with diabetes. Changing life situations, such as losing a job with healthcare coverage, can be detrimental for individuals who rely on this life-saving technology to manage their condition.
Fortunately, many companies offer cost-saving programs – and knowing the up-front prices and available discounts for certain AID systems can help you choose the most affordable option for your needs.
Tandem Control-IQ+: t:slim X2 and Mobi
Flexible Payment Plan
Tandem’s Control-IQ+ algorithm powers automated insulin delivery with two different tubed insulin pumps: the t:slim X2 pump and the more compact Mobi pump. Without insurance, both pumps cost $4,000, but purchasing the t:slim X2 pump directly from Tandem Diabetes Care and using the Flexible Payment Plan allows users to spread the cost of their insulin pump over an extended period of up to 48 months. The monthly payments start at $50, which includes 10 infusion sets and cartridges per month. There is a one-time setup fee of $5 and a $50 down payment, as well as a $6.50 monthly processing fee. Those covered by Medicare or Medicaid are not eligible for the Flexible Payment Plan.
Tandem Upgrade Program
Through this program, individuals using a non-Tandem pump (with at least six months remaining on the warranty of their current pump) can switch to a Tandem AID system for a one-time payment of a $999 program fee. After receiving the Tandem pump, you will have 90 days to decide if it's right for you. If you decide to return the pump, the program fee will be partially refunded.
Commercial insurance
Tandem notes that nearly one-third of customers with commercial insurance pay $0 out of pocket, and these pumps are usually covered under the DME benefit. This means you’ll typically work with a DME supplier who submits a prior authorization request to your insurer. Approval often requires documentation of prior insulin pump use or multiple daily injections and frequent glucose monitoring.
Medicare
Medicare Part B covers insulin pumps as DME if you meet specific criteria – like frequent blood glucose testing and insulin-dependent diabetes. Medicare also covers the Dexcom CGM separately under DME benefits, and bundling your Dexcom CGM and Tandem pump claims can sometimes reduce administrative burden and improve your chances of approval. To minimize out-of-pocket expenses, use an in-network DME supplier and provide thorough documentation from your healthcare provider to speed prior authorization.
Medtronic MiniMed 780G
Without insurance, the Medtronic MiniMed 780G insulin pump costs $8,574 – but both commercial insurance and Medicare coverage can bring this number down. In addition, Medtronic has multiple cost-saving programs that allow you to upgrade the system after a certain period under the warranty.
Pump Pathway Program
The Pump Pathway Program lets eligible Medtronic insulin pump users upgrade to the MiniMed 780G for $399, as long as their current pump has at least six months of warranty left. The upgrade includes one insulin pump (not CGM supplies). Users must return their old pump within 30 days of receiving the upgrade. Traditional Medicare users within the 13-month rental period, or those using Medicare Advantage health plans or Kaiser Permanente Medicaid health plans, are not eligible for this program.
Switch2System Program
While the Pump Pathway Program is for hardware pump upgrades only, the Switch2System Program allows Medtronic customers with at least six months remaining on their pump warranty to pay $499 for a new insulin pump, a compatible transmitter, and one month of consumables and sensors. The transmitter and sensors are not available for those enrolled in federal, state, or government-funded healthcare plans. If you are using Kaiser health plans or Medicare within a 13-month rental period, you are not eligible for this program.
For Medicare customers transitioning to either of the above programs during the rental period, an Advance Beneficiary Notice of Non-Coverage (ABN) is required. Individuals with commercial insurance must verify insurance compatibility with the upgrade to ensure continued supply coverage.
Medtronic Pump Trade-in Program
For individuals using out-of-warranty insulin pumps, the Trade-In Program allows customers to receive credits for the following:
- $500 credit for trading in a MiniMed, Tandem, Animas, or Roche pump
- $250 credit for trading in an Omnipod receiver
MiniMed 770G Pump Software Upgrade Program
Customers using the in-warranty MiniMed 770G pump can receive a software upgrade to the MiniMed 780G pump at no cost. CGM products and consumables are not included, and the ability to upgrade may depend on insurance coverage and plan designs.
Flex Program Payment Plan
The Medtronic Flex Program allows eligible users to get a MiniMed 780G insulin pump and starter kit through affordable monthly payments starting at $49/month (based on insurance). The starter kit includes an insulin pump, a transmitter, and a 3-month supply of sensors, infusion sets, and reservoirs. Ongoing supplies beyond the first 90 days are not included in the Flex Program. The program is open to those with public, private, or no insurance.
Other Medtronic cost-saving programs
Medtronic also offers Financial Assistance Programs for low-income families or individuals significantly impacted by healthcare costs, such as those losing health insurance due to unemployment. Only those who do not have insurance coverage for Medtronic’s products are eligible.
Individuals on a Payment Deferral Program can defer payments on Medtronic products for up to 90 days with proof of job loss or furlough.
The MiniMed 780G system is covered by both traditional Medicare and Medicare Advantage. You can visit Medtronic Medicare Support for help with enrolling and checking benefits.
Omnipod 5 Co-Pay Savings Program
For those without health insurance, the Omnipod 5 typically costs around $9,000 annually. Many health insurance plans cover this system, including coverage under Medicare Part D. Most individuals with commercial or Medicare insurance coverage pay less than $50 per month.
Individuals with an Omnipod 5 prescription who demonstrate a financial need for assistance may be eligible to receive a copay card to reduce their monthly out-of-pocket expenses.
Beta Bionics iLet
While the Beta Bionics AID system costs $3,500 without insurance, the company announced in 2023 that the iLet system and monthly supplies would be covered under the pharmacy benefit for people under some insurance plans – which could significantly reduce the costs for those with this coverage.
Sequel twiist
The newest AID system, Sequel twiist, is expected to be available soon. While the retail price for those without insurance has not yet been announced, users with insurance can try the system for free the first month, and it is projected to cost no more than $50 per month thereafter once it is available. It should be covered by most commercial insurance plans and be available at local pharmacies.
The bottom line
AID systems have the potential to dramatically improve the lives of people with diabetes – but only if they are affordable and accessible. Navigating the complexities of insurance coverage takes persistence, documentation, and sometimes creative financial strategies. By understanding your coverage options and tapping into available cost-saving resources, you can improve your diabetes management with the latest technologies, without breaking the bank.
Learn more about insurance for diabetes management here: