President Biden is proposing that hearing aids be a covered expense under Medicare. Some Medicare Advantage policies cover it. It's time to pull some information together, my fellow citizen-scientists, to help inform our thinking.
Various degrees of hearing loss affect 70% of those adults over 70. In one study, researchers found that among those over 70
- 40% had mild hearing impairment
- 23% moderate
- 4% severe hearing impairments.
As I detailed in my writing, hearing loss comes with other debilities, in the day-to-day getting around and a loss of exertional abilities. More importantly, loss of hearing impairs our ability to interact with others. As Helen Keller said, “Blindness separates us from things, but deafness separates us from people.”
There is no overwhelming evidence that hearing aids will slow the decline in our physical abilities, but can we doubt that they can reduce our separation from people? Hearing aids are, at the minimum, a quality of life issue, like clean air, inexpensive, nutritious food, or eyeglasses. (Also, a medical device not covered by Medicare).
In the current system, an individual must be evaluated by an audiologist who will prescribe a specific hearing aid. The President's proposal makes some hearing aids over-the-counter opportunities. But before looking at the specifics, we need to learn a bit more about the current audiologic ecosystem. For that, we turn to an article by Matt Stoller.
The Audiologic Ecosystem
Hearing aids are essentially a tiny microphone with speakers inside your ears. The technology is not significantly different than a pair of wireless headphones that allow you to cancel the surrounding noise (typically $300 or so). But hearing aids are classified by the FDA as Class I or II medical devices – Class 1 provides minimal harm and does not come in contact with our organs, Class II, while equally non-invasive, pose a greater risk and requires reassurance they will do no harm. The typical price for a hearing aid is $4500; almost 30-fold greater than the cost of Apple AirPods that have the same technology but less software
At $4800 for two hearing aids, buying hearing aids is “the third largest purchase for many after a house and a car.”
According to the National Association of Science, Engineering, and Medicine, only 20% or so of adults that would benefit from a hearing aid have one – many citing cost as the primary reason for not purchasing the device. As I said, hearing aids are prescribed. The cost of the examination, device, and customization of the fit and amplification to the patient are bundled into one fixed payment. 50 to 60% of that bundle covers the cost of the device, which unsurprisingly has a range of costs based not only on their function but to whom they are being sold – Costco’s costs are far less for the same device than the neighborhood audiologist. The remaining 40% covers the examination and tweaking of fit and amplification. In the past, tweaking was painstaking and time-consuming. Today’s digital hearing aids can be at least acoustically tuned using your smartphone.
In 2017 Congress passed the Over-the-Counter-Hearing-Aid-Act requiring the FDA to approve OTC hearing aids by 2020. Despite the signature of President Trump, the FDA slow-rolled the approval, and it took additional pressure from President Biden to get the FDA to promulgate the new regulations. Basically, for the 60% or so with mild to moderate hearing loss, you can now purchase a hearing aid without the involvement of an audiologist.
There are six manufacturers of hearing aids in the US. I think it is fair to say that they form a cartel. They have pooled their patents so that new manufacturers have a “high barrier to entry,” the economic term for it costs a lot to join the club. They are vertically integrated, owning not only the manufacturing but audiology services and audiology insurance – this allows them to control the device, its prescription, and payment.
- Five of the top six control 90% of the hearing aid market
- Typical gross margins are 70-80%
- “Each supplier has its own proprietary fitting software, complicating the learning process for audiologists when they to shift to another supplier.” – this locks audiologists into one product. The government of the UK pays $65 for hearing aids; the wholesale price in the US is $3-600.
Like other potentially wounded corporations, the response to the new legislation is lobbying and financial contributions. As Stoller points out, while much of the funds “tilt right” (Republicans still stereotypically support Big Business), monies have also flowed to the Democrats to cover all bets.
“This story of industry structure, soft corruption, and harm, along with an attempt by regulators to push back, is not isolated to hearing aids. In fact, the hearing aid market looks a lot like glasses or dental implants; consumers rely on a trusted medical professional, who has in some cases been subverted by a dominant firm, or in other cases is holding out to help patients, but has increasingly less power in either case.”
The new regulations
Severe hearing loss will still require a prescribed device. But for many, almost two-thirds, over-the-counter devices will now be available. Bose has a new device out, and there are “workarounds” for using iPhones already in the marketplace. OTC devices will all be innovations, and the regulations do place guidelines on their functional abilities. More specifically, there are limits on how much amplification can be made, the lag between the microphone hearing the words and the speaker amplifying them to the patient, and the range of sounds amplified.
In February, the House introduced a bill to end Medicare’s exemption of hearing aids and examinations from their coverage. It has been referred to several committees, and not much has been heard since then. Similar vision and dental benefits have been stripped from legislation for the hearing benefit to go forward. If approved, as currently written, traditional, fee-for-service Medicare will cover the cost of hearing aids for “individuals diagnosed with moderately severe, severe, or profound hearing loss.” Many Medicare Advantage Programs already offer this benefit and may be part of their popularity.
Examination by an audiologist remains a requirement for those with severe hearing loss, while it remains recommended for those with mild to moderate loss. Like other forms of self-reporting, we tend to underestimate our debility in this regard, so professional guidance should be strongly considered.
I think that hearing aids are a demonstrable need, that they improve the quality of life for those of us that are hearing impaired. The pricing has been kept artificially high through a cartel of manufacturers who make new entry into the market difficult and have integrated their offerings to capture many components of care beyond simply the device. They are a small example of the worst qualities of Big Pharma and Big Device in our marketplace – Gordon Gecko was wrong, “Greed is not good.”
The Government Accounting Office estimates the cost, including relabeling of current devices, at $62 million. An editorial in JAMA’s Health Forum suggested some tweaks to cost. The role of the audiologist in helping customize the sound profile of the hearing aids should be included. Those OTC devices will require instruction as well, perhaps a new area for DIY videos. The author also raised the possibility that funding for hearing aids should be based on the degree of loss. That opens its own “can of worms” in defining what degree of loss will qualify, and what exemptions might be made. Finally, because payments are based upon ICD-10 codes, they will need to be upgraded to account degree of hearing loss in addition to the underlying cause.
What do you think now that you have more information?