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 global hearing aid market is expected to rise to US $7.62 Billion by 2023.

• The number of people who need hearing aids in the US is approximated to rise by 6.38% in 2023.

Research Strategy

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

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