How will new FDA Hearing Aid Regulations Impact Health Plans?

The Food and Drug Administration’s (FDA’s) new over-the-counter (OTC) hearing aid rule went into effect on October 17, 2022, and health plans are wondering what it means for them. Among the many questions they may need to grapple with, a few are particularly salient:

• How will the new rules impact their benefit offerings?
• What new opportunities will open?
• What potential pitfalls should they be aware of?

Introducing OTC Hearing Aids
First, let’s examine the new regulatory framework the FDA established. For the first time, all hearing aids will fall under two categories: prescription hearing aids and OTC hearing aids.

Prescription hearing aids will require a consumer to have a prescription for a hearing aid from a physician, audiologist or a licensed hearing instrument specialist.

The other – brand new – category of hearing aids will be available over-the-counter to people 18 and older with perceived mild-to-moderate hearing loss without the involvement of a licensed hearing care professional. These OTC hearing aids do not require a prescription.

This OTC category is further broken down into two types of products: self-fitting OTC hearing aids with a few preset settings that users can control either through an app or volume control wheel; and the second type, which is not self-fitting – basically an amplifier with volume control.

While the number of products in the marketplace may be limited initially, expect to see an increase in OTC hearing aids through the rest of 2022 into the first half of 2023.

The availability of the OTC devices is expected to increase awareness of hearing care in general and encourage more consumers to address their hearing health needs. These are vitally important goals. Approximately 40 million people have some degree of hearing loss, yet it is widely undiagnosed and untreated. In fact, of the 35 million Americans who could benefit from hearing aids, only one-third use them.¹

Expanding Membership

The regulations may provide an opportunity for health insurers to attract new members – and retain existing ones - with hearing loss. The potential market is huge – an estimated 25.4 million U.S. residents aged 12 years or older have mild hearing loss, and another 10.7 million have moderate hearing loss.²

Health plans could, for example, consider covering OTC hearing devices as part of the hearing benefits package provided to their Medicare Advantage plan members. Their message: members now can receive an expanded hearing benefit which includes an OTC hearing aid for those who qualify at a nominal or no out-of-pocket charge. Additionally, members who would prefer a prescription hearing aid could be covered for prescription devices, which would likely include an out-of-pocket expense.

Educating Members
Health plans offering the OTC benefit can also leverage the opportunity to educate members about the significant role hearing aids can play in improving their overall health. Enhanced hearing ability may lead to several positive health outcomes such as improvements in cognitive ability, mental health and balance, and a more active social life.

Untreated hearing loss, on the other hand, is associated with social isolation and loneliness and can be a gateway for many comorbidities including dementia, depression, and increased risk of injury-causing falls.

All these comorbidities result in higher health care costs. Individuals with untreated hearing loss incurred, on average, 46% higher total health care costs — $22,434 per patient— versus their ‘normal’-hearing peers over the course of a decade, with health plans covering $20,403 of this amount, according to a Johns Hopkins study.³

Health plans can also combine an expanded hearing benefit with member education on how to use hearing aids and the importance of wearing them at least eight hours daily. Underutilization is a significant problem – slightly more than one-third of people with hearing aids wear them less than eight hours a day.⁴ And compliance decreases over time.

Hearing loss is the third most chronic physical condition in the U.S. yet is largely untreated. By allowing retail sales of affordable hearing aids, the FDA regulations go a long way in helping consumers address this challenge yet could bring meaningful risk to the insurer. For health plans, now is the time to carefully weigh the potential value of an OTC offering against the risks and concerns.