Mary, I love your analysis here! But the truth is, that I don't think Medicare really cares that CGM's, or Insulin Pumps are keeping people out of ER's & ICU's. However, Diabetic patients can truly attest that these devices really do help manage their disease as WE all know that they can. You being a Medical Professional know these things first hand as you saw and lived it in person. CBS - 60 minutes did a segment not so long ago where hospitals, and ER doctors are rewarded with bonuses for admitting Medicare age patients. These hospitals set quotas so they can bill Medicare for the extra revenue. The hospitals would much rather admit Medicare aged people than non-medicare aged people so they won't lose out on this revenue. This is where Medicare IMHO lacks the proper watchdogs to keep costs in check. Basically, these hospitals are committing fraud, and getting away with it.
You and my wife are close to the same age, and we went through exactly what you are saying as we also had a BCBS policy that paid for my wife's Omnipod - Pods, but at age 65 that all stopped because just like your G4 CGM, Medicare said this was NOT Durable Medical Equipment (DME) because they are disposable. We argued through 4 levels of appeals before CMS that they are wrong, in that devices such as these should be considered Supplies, but CMS still won't buy into it to this day. ONLY Congress can change these rules & laws!
I wish you the best in trying to get your CGM covered through your supplemental plan, but unfortunately, I think they may tell you that if CMS won't cover it, then by law neither can they cover it. We went down that road with the Omnipod Pods, and that is what we were told when we wanted to buy a supplemental plan through BCBS. So as you said, "don't hold your breath" or God forbid you may be admitted to the hospital to help them meet their Medicare quotas.