Medicare Advantage & Hearing Health

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Buying Hearing Aids: Cash Transactions vs Insurance Coverage

Most Americans that have hearing problems and wear hearing aids prefer to purchase them through cash transactions rather than using their insurance. This is because most of the insurance coverage for hearing aids pays only a portion of the costs and tends to limit the patients to specific brands.

Cash Transactions Versus Insurance Coverage

  • A survey by Knowles Electronics reported that 40% of people who bought hearing aids used their insurances to pay a portion of the cost.
  • The other 60% of Americans that bought hearing aids used cash transactions to make the purchases.
  • Many Americans who use hearing aids have to pay for them using cash transactions as most insurance companies that cover the costs partially limit them to specific brands of hearing aids, which may not address their issues or work right for the consumer.
  • Only 15%-20% of people who need hearing aids wear them, and this is due to their high cost.

Hearing Aids Purchases By 2023

  • The Over-The-Counter Hearing Act of 2017 is expected to increase the number of people that wear hearing aids as it seeks to allow people with hearing impairments to purchase them over the counter and avoid fees attached to consulting physicians.
  • However, this Act will cover specific cases of people that need hearing aids, will exclude children, and is expected to increase the number of people that purchase hearing aids using cash transactions rather than insurance.
  • There is a need to educate people with hearing loss problems on the advantage plans of insurers that can help them reduce the costs of acquiring hearing aids.
  • The number of people who need hearing aids in the US is approximated to rise by 6.38% in 2023.

Research Strategy

We searched through reports and statistics provided by the National Institute on Deafness and Other Communication Disorders (NIDCD) to discern the percentage of Americans who purchase hearing aids in a cash transaction versus those who use their insurance coverage. Moreover, these reports offered information about the growth of the number of people that will be using hearing aids by 2023. We went through the findings by the World Health Organization on the number of Americans that are using hearing aids in the ways through which they acquire them. Given the available information and trends, we then concluded how the number of people obtaining hearing aids using either insurance or cash is likely to evaluate by 2023.

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Medicare Advantage: Hearing Aid Coverage by 2023

In 2017, 57% of those enrolled in Medicare Advantage were enrolled in plans that covered hearing aids. However, due to the fact that plans change every year and that plans are greatly influenced by the political landscape, which could change in the 2020 presidential election, it is unclear how many Medicare Advantage plans will offer hearing aid in 2023. If the current trend continues, it is likely that the number of plans covering hearing aids will continue to rise.

Current Coverage

  • Currently, Medicare does not cover hearing aids unless they are "medically necessary", like to treat for vertigo.
  • Additionally, most of the Medicare supplement plans do not offer coverage for hearing aids, unless medically necessary.
  • Some Medicare Advantage plans cover hearing, vision, and dental, but not all.
  • Currently, about 33% of seniors are enrolled in Medicare Advantage plans.
  • In 2017, Congress passed the Over-the-Counter (OTC) Hearing Aid Act, which helped people obtain hearing aids without a prescription, in attempts to bring the cost down.
  • On average, the cost for two hearing aids (one for each ear) is around $5,000, making them inaccessible for many seniors.
  • 80% of adults who could benefit from hearing aids currently don't get one, mostly due to stigma surrounding their use and the high cost.
  • In 2016, 46% of those enrolled in Medicare Advantage plans had some hearing aid coverage, and 41% of those enrolled in Medicare Advantage plans had hearing aids covered with zero-additional premium plans. In 2017, this increased to 57% of those enrolled in Medicare Advantage enrolled in plans that covered hearing aids, and 55% of Medicare Advantage plans offered hearing aid coverage.

Future Coverage

  • There are multiple laws in Congress that would expand all Medicare coverage to include hearing, dental and vision overage, like the Medicare Hearing Aid Coverage Act of 2017 and Seniors have Eyes, Ears, and Teeth Act, but these bills have mostly died in committee.
  • By 2028, experts predict that the number of seniors enrolled in Medicare advantage could reach 43%.
  • Challenges in predicting an exact percentage of Medicare Advantage plans that will cover hearing aids in the future include the fact that plans only release coverage information about the plans for the next year (plans change every year) and that political decisions tend to have high influence on the plans. Since a presidential election is coming up in 2020, which could have a lot of influence over the Medicare Advantage program as a whole including its coverage of hearing aids, it may be impossible to predict.
  • Based on a review of the three major Medicare Advantage insurance companies, Humana, UnitedHealthcare and BlueCross BlueShield, it seems that all are planning to offer at least some hearing coverage for 2020.
  • If the trend of increasing enrollment in Medicare Advantage continues, and most insurance companies that offer Medicare Advantage plans include hearing benefits in at least some of their plans, it is assumed that the number of seniors obtaining hearing coverage through Medicare Advantage will continue to rise (like it did from 2016 to 2017).

Research Strategy

First, we looked for information specifically about how hearing aid coverage under Medicare and Medicare Advantage will change in the future. Through this, we found information on current Medicare and Medicare Advantage coverage, as well as laws that have been introduced to Congress. We reviewed these laws to see how exactly they would affect hearing aid coverage under Medicare and Medicare Advantage.

Next, we searched more broadly for information on predictions surrounding Medicare Advantage coverage as a whole, not specific to hearing aids. We hoped that by searching more broadly we could find information about Medicare Advantage plans currently offering hearing, vision and dental benefits, as well as future trends. This provided information in general on hearing coverage under Medicare Advantage, and some insight into why a specific percentage prediction may be challenging to predict.

Finally, we tried to find information on hearing aid coverage in the major Medicare Advantage programs (UnitedHealthcare, Humana, or BlueCross BlueShield). We were hoping that these companies would indicate whether they plan to continue covering hearing aids in the future. However, these companies only released information about what the plan for the next immediate year, not what the coverage would look like into the future.
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Medicare Advantage Plan Members with Hearing Aid

It is estimated that by 2023, 8.9 million Medicare Advantage members will experience hearing loss. Of these members, between 6.5 million and 8.9 million will have hearing aid coverage.

Medicare Advantage Enrollment

  • In 2019, there were 22 million people enrolled in Medicare Advantage Plans. Since enrollment is expected to grow at a rate of between 4% and 6% per year until 2023, we assumed growth of 5% and were able to estimate the total number of enrollees in 2023 at 26.7 million (calculation provided in the research strategy).

Medicare Advantage Enrollees with Hearing Loss

  • It is estimated that in 2023 at least 8.9 million Medicare Advantage enrollees will experience hearing loss (calculation provided in the research strategy).

Medicare Advantage Enrollees with Hearing Aid Coverage

  • In 2015, only 47% of Medicare Advantage enrollees had a plan that covered hearing aids, while this increased to 73% in 2018. This shows that even without laws mandating coverage, insurers are making the move to provide more coverage.
  • If the percentage of enrollees choosing coverage that included hearing aids stayed consistent in 2019, that would mean 5.4 million (calculation provided in the research strategy) enrollees with hearing loss would have a plan that covers hearing aids.
  • The two largest players in Medicare Advantage are United Healthcare and Humana. Both announced changes and improvements to hearing aid coverage in 2019. This continues a trend that has been happening over the last five years.
  • Since there is no definitive way to determine whether more private insurers will decide to cover hearing aids, or which plans enrollees will ultimately choose, a range of possible numbers is being provided, assuming somewhere between 73% and 100% of enrollees will have coverage. We assumed that the coverage would not decrease since the trend over the last five years has been to increase coverage.
  • It is estimated that between 6.5 million and 8.9 million enrollees with hearing loss will have a Medicare Advantage plan with hearing aid coverage in 2023.

States That Mandate Hearing Aid Coverage

  • "Colorado, Delaware, Georgia, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Missouri, New Jersey, New Mexico, North Carolina, Oklahoma, Oregon, Tennessee, and Texas require that health benefits plans in their state pay for hearing aids for children. Arkansas, Connecticut, Illinois, New Hampshire, and Rhode Island require coverage for both children and adults. Wisconsin requires coverage for both hearing aids and cochlear implants for children."
  • Based on the above, only four states, Arkansas, Connecticut, Illinois, New Hampshire, and Rhode Island, require hearing aid coverage for adults. That means in all other states, coverage would be at the discretion of the insurers.

Research Strategy

To estimate the total number of Medicare Advantage enrollees in 2023, we did the following calculation:
22 million (2019 enrollees) * 1.05*1.05*1.05*1.05 (5% growth for 4 years) = 26.7 million enrollees in 2023

It is estimated that 1 in 3 people aged 65 or over has hearing loss. We made the assumption that the people who are members of Medicare Advantage have hearing loss at the same rate as the general population. Based on that statistic, and using the estimated number of Medicare Advantage enrollees in 2023, we were able to estimate the number of Medicare Advantage members with hearing loss in 2023 as follows:
26.7 million (2023 enrollees) *1/3 (1 in 3 people with hearing loss) = 8.9 million enrollees with hearing loss in 2023.

It should be noted that the number of people with hearing loss increases as people age. It is reported that two out of three people over 70 have difficulty hearing. Therefore, if a significant number of Medicare Advantage members are over 70, compared to those between 65 and 70, the estimate provided above would be on the low side. Unfortunately, statistics on the number of enrollees that were between 65 and 70 was not publicly available. Our estimate would be the minimum number of enrollees with hearing loss in 2023.

To estimate the number of enrollees with hearing loss that were covered by hearing aid insurance in 2019 we used the following calculation:
22 million (2019 enrollees) * 1/3 (1 in 3 people with hearing loss) * 0.73 (people who chose a plan with hearing aid coverage in 2018/2019) = 5.4 million

To estimate the number of enrollees with hearing loss that were covered by hearing aid insurance in 2023 we used the following calculations:
8.9 million (2023 enrollees with hearing loss) * 0.73 (people who chose a plan with hearing aid coverage in 2018/2019) = 6.5 million
8.9 million (2023 enrollees with hearing loss) * 1.0 (assuming by 2023 all insurers offering Medicare Advantage will cover hearing aids) = 8.9 million

Because Medicare Advantage coverage is provided by private insurers, a definitive answer on how many enrollees will have hearing aid coverage in 2023 could not be determined because it is dependent on what each private insurer decides to provide. Since there is currently no federal law that mandates hearing aid coverage, each provider is instead guided by any state laws. Information on the states that require hearing aid coverage is provided above.

From Part 01
  • "Among respondents to the 2014 Survey of Household Economics and Decision Making who had a household income of less than $40,000, 45 percent reported going without some form of medical treatment in the preceding 12 months (Federal Reserve, 2015). The cost of hearing health care includes the cost of services and technologies, and these costs may be incurred multiple times over a period of many years in order to maintain and replace hearing aids and other technologies, to continue to monitor hearing status, and to retain the benefits from auditory rehabilitation and other services."
  • "According to the Hearing Loss Association of America, approximately 48 million Americans (20 percent) report some degree of hearing loss."
  • "Approximately 35% of those over age 65 in the United States, or about 17.5 million older Americans, have a significant hearing loss that is sufficient to make them hearing-aid candidates (Cruickshanks, Zhan, & Zhong, 2010; Schoenborn & Marano, 1988). Yet, only about 20% of those older Americans who could benefit from hearing aids actually seek them out, and of those who do seek them out, only about 50%–70% are satisfied with them and use their hearing aids regularly (Kochkin, 1993a, 1993b, 1993c, 2000, 2005, 2009; Perez & Edmonds, 2012). The large discrepancy between the number of older adults in need of hearing health care and those receiving benefit from hearing aids was one of the motivating factors behind the organization of a National Institute on Deafness and Other Communication Disorders/National Institutes of Health (NIDCD/NIH) working group on accessible and affordable hearing health care for adults with mild-to-moderate hearing loss."
  • "To test the assumption, we conducted a nationwide survey in February 2017. A total of 809 participants aged 50 years and older were selected from a nationwide panel of more than 30 million people that is balanced to be representative of the US population. The large sample size resulted in a small (3.45 percent) margin of error. "
  • "Beginning next year, if not sooner, consumers should have access to over-the-counter (OTC) hearing aids that are expected to bring down the price and hassles associated with purchasing one. The change comes thanks to a federal law passed in 2017 directing the U.S. Food and Drug Administration (FDA) to ease barriers to buying a hearing aid."
  • "Growth will be driven by the increasing global prevalence of hearing loss. According to the World Health Organization (WHO), approximately 466 million people have disabling hearing loss worldwide, including 34 million who are children, and this number is expected to grow to nearly 630 million by 2030."
From Part 03
  • "Not to be outdone, Humana, the second-largest player in the MA market, with 18 percent of enrollees in 2019, views hearing coverage — along with fitness program memberships and home-delivered meals following an inpatient hospital stay, for example — as a way “to care for the whole person,” according to a press release. Members will “save an average of $890 per hearing aid compared to national retail averages.” Moreover, each hearing aid purchase includes a 45-day money-back guarantee, a 3-year manufacturer’s repair warranty, and a 3-year manufacturer’s coverage for one-time loss & damage."