What is considered equipment vs. supplies? Your comprehensive guide

October 2, 2025 •

3 min read

In accounting, a key difference between equipment and supplies is that equipment has a useful life of over one year, while supplies are typically used up within a single fiscal year. Understanding what is considered equipment vs. supplies is crucial for managing health-related expenses, navigating insurance claims, and maintaining accurate records.

Quick Summary

Equipment refers to durable, long-term assets, such as a hospital bed or wheelchair, that are used repeatedly over several years. In contrast, supplies are consumable or disposable items, like bandages or test strips, with a shorter lifespan that require regular replenishment. The classification depends on several key factors, including durability, cost, and purpose.

Key Points

Durable vs. Consumable: The primary differentiator is whether an item is durable and reusable (equipment) or consumable and disposable (supplies).
Lifespan Matters: Equipment has a longer useful life, typically several years, whereas supplies are intended for immediate or short-term use.
Cost and Accounting: Equipment is a higher-cost, depreciable asset, while supplies are lower-cost, expensed items.
Insurance Coverage Varies: Health insurance, including Medicare, covers Durable Medical Equipment (DME) differently than medical supplies, with different coverage rules and cost-sharing.
Purpose is Key: For health insurance, DME must serve a specific medical purpose, not just convenience.
Check Your Policy: Always consult your insurance plan details and provider to confirm coverage for specific items before purchase.

The Core Principles of Classification

To properly categorize an item, you must consider its durability, longevity, and intended use. The fundamental rule is based on its lifespan and whether it is consumed during use. This distinction has far-reaching effects on financial planning, budgeting, and insurance coverage, particularly in the health and medical sectors.

What Defines Medical Equipment?

Medical equipment, often referred to as Durable Medical Equipment (DME), is designed for long-term, repeated use. These are items that maintain their original shape and function over time and are not consumed or worn out quickly.

Key characteristics of equipment include:

Durability: It is built to last, with a projected lifespan of at least three years, as defined by Medicare.
Repeated Use: It can be used multiple times without losing its identity or primary purpose.
Higher Cost: Due to its durability and complexity, equipment typically has a significantly higher unit cost than supplies, though specific monetary thresholds can vary by institution.
Primarily Medical Purpose: For insurance purposes, DME must be primarily used for medical reasons and not generally useful to someone without a medical condition.
Repairable: If damaged, it is usually more cost-effective to repair the item rather than replace it entirely.
Depreciable: In an accounting context, the cost of equipment is capitalized as a long-term asset and depreciated over its useful life, spreading the expense over several years.

Examples of durable medical equipment include wheelchairs, hospital beds, oxygen concentrators, CPAP machines, and blood sugar monitors.

What Constitutes Medical Supplies?

Medical supplies are consumable, disposable items that are typically used for a single purpose or have a very short lifespan. Unlike equipment, they are consumed or altered during use and must be replaced frequently.

Key characteristics of supplies include:

Consumability: They are used up, worn out, or lose their identity in the process of use.
Short Lifespan: They are intended for immediate or short-term use, often lasting less than one year.
Lower Cost: The individual unit cost of a supply item is typically lower than that of a piece of equipment.
Expendable: If a supply item is damaged or used, it is discarded and replaced with a new one rather than repaired.
Expensed: The cost of supplies is typically recorded as a current expense in the year they are purchased or used.

Examples of medical supplies include bandages, gauze, gloves, syringes, catheters, incontinence products, and glucose test strips.

Medical Equipment vs. Supplies: A Comparative Table


Feature	Equipment (Durable Medical Equipment)	Supplies (Medical Supplies)
Lifespan	Long-term (typically > 3 years)	Short-term, often single-use
Usage	Reusable	Consumable / Expendable
Unit Cost	Generally higher	Generally lower
Accounting	Capitalized and depreciated over time	Expensed in the period of purchase or use
Replacement	Repaired if feasible	Replaced when used or worn out
Purpose	Primarily for a medical condition	Supports ongoing medical treatment
Examples	Wheelchair, hospital bed, oxygen tank	Bandages, gloves, syringes, test strips

How Your Insurance Coverage Varies

Understanding the distinction is particularly important for health insurance coverage, as providers treat DME and medical supplies differently. Medicare, for example, typically covers medically necessary Durable Medical Equipment under Part B, subject to specific criteria, deductibles, and coinsurance.

Durable Medical Equipment (DME): Covered when deemed medically necessary by a healthcare provider for use in the home. Coverage often involves rental or purchase options, and suppliers must be enrolled in Medicare.
Medical Supplies: Coverage for consumable supplies varies greatly by insurance plan and specific medical condition. While some supplies directly related to a DME (like CPAP tubing) might be covered under the DME benefit, many other common supplies are covered under different benefits or may not be covered at all.

It is always advisable to check your specific plan's policy and confirm with your insurance provider to understand what is covered and what your out-of-pocket costs will be. For reliable information on federal health programs, the official Medicare website is an excellent resource: www.medicare.gov.

Conclusion: Making Informed Health Decisions

While the line between equipment and supplies can sometimes seem blurry, the core difference lies in an item's durability, longevity, and how it is used. Equipment is a long-term asset designed for repeated use, while supplies are short-term consumables. This seemingly simple distinction affects everything from managing personal healthcare budgets to navigating the complexities of insurance coverage. By understanding these fundamental criteria and reviewing your specific insurance policy, you can make more informed decisions regarding your health-related purchases and financial planning.

Frequently Asked Questions

A blood pressure monitor is generally considered Durable Medical Equipment (DME) because it is a reusable, long-lasting device designed for a specific medical purpose.

Bandages, gauze, and other wound care products are considered medical supplies. They are consumable, single-use items that must be replaced after use.

Medicare considers items with a lifespan of at least three years as DME and covers them under Part B, typically subject to deductibles and coinsurance. Medical supplies, being expendable, are covered differently and sometimes fall under separate benefit categories or may not be covered.

Some items, particularly those with a lower cost but a reusable nature, can be hard to classify. The classification often depends on specific accounting policies or insurance guidelines. The determining factors are typically the item's cost, useful life, and whether it's more feasible to repair or replace it.

A CPAP (Continuous Positive Airway Pressure) machine is considered Durable Medical Equipment (DME). However, the disposable components that need regular replacement, such as filters, masks, and tubing, are classified as medical supplies.

Yes, many insurance plans, including Medicare Part B, will cover the rental of durable medical equipment if it's deemed medically necessary by a doctor. The coverage amount and terms will depend on your specific policy.

The best way to determine coverage is to contact your health insurance provider directly. You can also ask your doctor or supplier for the specific Healthcare Common Procedure Coding System (HCPCS) code for the item to help you inquire about your plan's benefits.

A reusable digital or infrared thermometer is generally considered equipment due to its long-term use. A single-use, disposable thermometer would be considered a supply.