Can Health Tech Devices Be Covered by Insurance?

Health tech devices are growing in popularity. Technology offers multiple ways to support your health, from wearable products that measure your heart rate and count your steps, to apps that record your weight and daily food consumption. Insurance companies have been slow to add coverage of these devices to their policies, but the barriers to acceptance are not insurmountable.

Key takeaways:
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    Most health insurers cover a percentage of the costs associated with freestanding health tech devices, provided a physician prescribes them.
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    Privacy is a significant challenge for device and app manufacturers, and overcoming this issue is vital to achieving insurance acceptance.
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    Devices and apps that obtain FDA approval stand a better chance of being accepted for health insurance coverage.

One of the few things you can count on in life is that insurance companies want their members to remain as healthy as possible. Screening, early treatment, and positive patient outcomes all help to reduce their payouts. This factor is driving insurers to embrace many health tech devices that support monitoring patients’ vitals. While your insurance is unlikely to pay for an Apple smartwatch for you, it might cover some helpful apps and devices.

Types of health tech devices

Healthcare devices currently represent one of the fastest-growing sectors of digital technology. A 2020 report shows the value of the Internet of Medical Things (IoMT) sector is projected to reach $176 billion by 2026. Rising health awareness is pushing people to adopt the use of technology to monitor health concerns. Device categories include:

Freestanding devices

Insurance companies are most likely to cover the cost of freestanding health tech devices rather than wearables. These include patient monitoring devices connected via the Internet of Things (IoT), such as:

  • Sleep trackers;
  • CPAP/AP/BiPAP machines;
  • Blood pressure cuffs;
  • Blood glucometers.
  • Heart rate monitors;
  • Pulse oximeters;
  • Smart insulin pens;
  • Medication dispensers.

Most of these devices contain sensors that collect data about the patient, such as heart rate, sleep patterns, step count, activity minutes, distance, floors climbed, and calories burned. They remind patients about screening and adhering to treatment plans and can alert medical providers if they record abnormalities.

What health insurance covers

While every insurer offers different policies, most companies cover a portion of the cost of these devices. Provided a physician prescribes the device, patients usually get a percentage of the purchase price covered and coverage of any supplies used in the device operation.

For example, blood glucometers often use lances and blood glucose strips, and these are typically covered under a comprehensive policy. For patients without insurance, many manufacturers have assistance programs you can apply for that will cover both the device and the cost of supplies.

Wearable devices

Smartwatches are the best-known form of wearable health tech, followed by rings. Apple and Fitbit lead the pack, closely trailed by the Amazfit T-Rex Smartwatch, Fossil Gen 5 Carlyle, Garmin Vivoactive 3, and others.

These devices monitor various bodily functions, including heart rate, fitness, exercise, weight, and even blood pressure. Several models can warn patients of impending cardiovascular problems so they can get preventive medical care early.

The use of wearable technology is proving beneficial in changing attitudes and behavior. These devices also provide data insurers can use to improve their understanding of medical conditions and incentivize patients to take ownership of their health.

What health insurance covers

As of 2022, few health insurers cover costs associated with wearable devices. Part of the reason for that could be the perception that using these devices is “trendy,” and it will take time for insurance providers to quantify the value for their businesses.

Some top-of-the-range health policies may cover the cost of a wearable if a physician prescribes it, but the chances are good that the doctor will need to make a strong case for their patient to get an insurer to pay.

Proactive insurance companies may contribute to the cost of a wearable as an incentive for patients to practice healthier habits, in the same way, that they sometimes cover the cost of gym memberships.

Smart apps

A wide range of mobile apps provides health support. From apps to manage your calorie intake and track your weight loss to meditation apps, fitness workouts, and digital physician appointments, there are multiple possibilities to choose from.

What health insurance covers

Since COVID-19 made virtual consultants the norm, telehealth apps such as Doctor on Demand, Amwell, and Talkspace for mental health therapy have become widely accepted in the medical community. Most insurers these days cover some of the cost of telehealth appointments. You usually have to fulfill specific privacy requirements to get your appointment covered, but it isn’t difficult.

Patches

Exterior and implantable patches are available for everything from stopping smoking to pain relief. Some patches are FDA-approved and most likely to be covered by insurance when prescribed by a doctor, while others have not yet achieved such recognition.

What health insurance covers

Generally, you can expect a patch device to be covered if it has any of these characteristics:

  • The patch is implanted or inserted into the body during a medical procedure, e.g., implantable cardioverter defibrillator (ICD) patches.
  • A device is FDA-approved for treating a specific condition, e.g., some anti-smoking patches.
  • The patch delivers medication in an immediate or timed-release dosage, e.g., insulin or pain management patches.

In all cases, for a patch to be covered by insurance, it must be prescribed by your physician.

Barriers to acceptance

While the benefits of health tech devices are obvious, and even insurers have begun to recognize their value, primary barriers exist to their acceptance. Since many freestanding devices are already covered, these factors mainly impact wearables and apps. A recent study identified the following factors preventing insurers from approving coverage:

  • Lack of regulatory approval.
  • Prevalence of false or inaccurate measurements.
  • Application errors that are caused by users.
  • Lack of technological competence to use the device properly.

Potential solutions to these challenges include a greater effort to address regulatory requirements, particularly concerning privacy issues and an increased focus on accuracy and training.

Future possibilities

Getting insurers on board with health tech devices, particularly wearables, will likely take a while longer. However, as the cost-benefit continues to build and manufacturers invest in clinical trials and studies, more insurers will begin reimbursing for these devices. High-quality data analytics and artificial intelligence will demonstrate the value of the information gathered, and as the therapeutic benefits increase, so too will market acceptance.

Consult with your insurance company to find out what devices they cover and the requirements you need to follow to obtain coverage.

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