Hearing aid affordability in the United States

Abstract

Purpose

Substantial out-of-pocket costs for hearing aids constitute a barrier to hearing health care accessibility for older adults among whom prevalence of hearing loss is high. This study is the first to estimate the proportion of Americans with functional hearing loss for which out-of-pocket expenditures for hearing aids would be unaffordable at current average costs and determine how affordability varies by sociodemographic factors.

Materials and methods

We utilized data from the 2016 American Community Survey to determine the proportion of adults with functional hearing loss for whom hearing aids would constitute ≥3% of annual income or have post-purchase income below a poverty standard. Chi-square tests were used to identify differences in affordability outcomes by sociodemographic characteristics.

Results

Results indicated that an average bundled cost of $2500 would constitute a catastrophic expense for 77% of Americans with functional hearing loss (N = 7,872,292) and would add an additional 4% of the population into poverty for the year (N = 423,548). Affordability outcomes varied significantly by age, race, sex, educational attainment and geographic location.

Conclusions

Hearing aids were unaffordable for three-fourths of Americans with functional hearing loss, and their purchase would result in impoverishment for hundreds of thousands of individuals. Reductions in out-of-pocket hearing aid costs to $500 or $1000 would alleviate affordability issues for many Americans with hearing loss. Future federal and state policy should address poor rates of insurance coverage for hearing care, specifically among Medicare and Medicaid, to reduce out-of-pocket costs for hearing care particularly for older adults.

Implications for rehabilitation

• An average out-of-pocket hearing care cost of $2500 was unaffordable for over three quarters of Americans with functional hearing loss.

• Hearing care affordability varied significantly by demographic characteristics such as age, sex, gender, educational attainment and geographic region.

• Affordability constitutes a significant barrier to hearing care accessibility in the United States, where most costs of hearing aids and rehabilitation are statutorily excluded from insurance coverage, including the largest insurer of Americans, Medicare.

Keywords:

• Hearing loss
• health care economics
• costs and cost analysis
• affordability
• hearing aids
• persons with hearing impairments

Introduction

Hearing loss affects over 37 million American adults and is the fourth leading cause of years lived with a disability worldwide [1,2]. The prevalence of hearing loss increases with age such that two-thirds of those 70 years and older have a clinically significant hearing deficit [3]. While hearing loss is commonly seen as a benign characteristic of aging, untreated hearing loss is associated with poorer communication functioning [4], social isolation [5], depression [6], economic productivity [7] and incident disability [8]. Hearing loss has also been independently associated with other health concerns among older adults such as cognitive decline [9], dementia [10] and risk for falls [11]. Recently, Livingston et al. [12] identified hearing loss as a potentially modifiable risk factor for dementia in later life. Recent studies have found that hearing aid use may lessen impacts of hearing loss on cognitive decline [13] and reduce health care expenditures due to lower overall utilization [14,15].

In 1965, the Centers for Medicare and Medicaid Services deemed hearing care to be “routine” and “low in cost” and did not include hearing care in Medicare Part B provisions [16]. In 1977, the Food and Drug Administration (FDA) began enforcement of conditions of sale for hearing aids. Specifically, hearing aids could only be procured from licenced professionals and required a medical evaluation or signed waiver prior to their fitting. The average cost for digital hearing aids in the United States (US) is nearly $2500 each, or $5000 for a pair [16,17]. Two hearing aids are the standard of care for most age-related hearing losses, which most commonly occur in both ears [18]. Lack of hearing care benefits alongside the 1977 FDA conditions for sale led to a mostly private-pay model [17]. High out-of-pocket costs have been cited as a significant barrier to hearing aid adoption [17,19,20].

The Department of Health and Human Services’ HealthyPeople 2020 [21], the Lancet Commission [12] and the National Academies of Science, Engineering, and Medicine [17] have considered the accessibility of hearing care a public health priority, which has resulted in the passage of the FDA Reauthorization Act and Over-the-Counter Hearing Aid Act of 2017. This law establishes a new class of hearing aids to be sold over-the-counter to those with mild and moderate hearing losses [22]. Consumers who purchase over-the-counter hearing aids eschew once primary distributors (e.g., ear, nose and throat physicians; audiologists; or hearing aid dispensers) which reduces costs and increases market competition by removing barriers to entry. The FDA is expected to release guidelines and regulations for over-the-counter hearing aids in 2021. Sensitivity analysis of cost can also inform whether other out-of-pocket hearing care costs are reasonable in scenarios other than the present market. Assessment of affordability of hearing aids using various cost inputs can inform whether other out-of-pocket hearing care costs are reasonable, such as those for direct-to-consumer hearing aids or future deductibles and copayments under insurance plans such as Medicare.

Affordability is whether a good or service is reasonably priced and does not impose an unreasonable burden on income [23] and requires actual health care expenditure data. Unfortunately, claims- or population-based consumption data on hearing aids and associated services are unavailable in the US because Medicare statutorily excludes these items under Part B benefits [24] and nationally representative expenditure data such as the Medical Expenditure Panel Survey [25] consolidate data with expenses from “other medical equipment and services” such as wheelchairs and eyeglasses.

The catastrophic and impoverishment analyses have been used to assess the impact of out-of-pocket medical expenditures for people in developing nations and are a methodological option for use when population-based consumption data are unavailable [26,27]. The catastrophic approach identifies whether the medical expenditure exceeds a certain proportion of income (e.g., ≥10%). For example, the passage of the Patient Protection and Affordable Care Act [28] determined health insurance to be affordable if the cost constituted no more than 8% of annual income [29]. The World Health Organization indicated that costs for hearing aids should not equal or exceed 3% of the per capita gross national product [30], which is similar to per capita gross national income in most developed countries. Alternatively, the impoverishment approach defines affordability in relation to a poverty standard such as the US Federal Poverty Level (FPL) [31] under which people would not be able to procure basic needs for survival after purchase of a good or service, for example [32,33]. These benchmarks of affordability provide a useful framework for examining hearing aid affordability and whether costs of these devices cause financial burden that would otherwise endanger procurement of other basic necessities.

Although cost has been cited as a significant barrier to the adoption of amplification, the present study is the first to assess affordability of hearing aids and associated services in the US. The purposes of this study were to address this gap in the evidence by estimating the proportion of Americans with functional hearing loss for which out-of-pocket costs for hearing aids would be considered unaffordable and determining if affordability outcomes varied by sociodemographic factors.

Materials and methods

Study data

We used data from the US Census Bureau's American Community Survey (ACS), which is a nationally representative, annual cross-sectional survey that collects demographic, social, economic and housing information from all 50 states, Washington District of Columbia, and Puerto Rico [34,35]. In 2016, the ACS had 2,490,616 respondents out of over 3.5 million sampled. Six percent (N = 142,242) of the respondents were excluded from our analytic sample due to missing income data. Non-responders for the income question were more likely to be younger (Cohen’s d = 0.73), Black (d = 0.32), or have educational attainment less than a high school diploma (d = 0.25). The present unweighted study sample included 2,348,374 adults (≥18 years) who provided income information and a response to the hearing disability question, Item 17.A: “Is this person deaf or does he/she have serious difficulty hearing?” The ACS subsample with self-reported disabling hearing difficulty included those who responded in the affirmative to Item 17.A and are hereto forth referred to as those with functional hearing loss. The sample of adults with functional hearing loss comprised 5.12% (N = 120,286) of the larger, unweighted ACS sample. Unweighted sample proportions indicated that respondents with functional hearing loss reported lower incomes than the overall study sample, were typically over the age of 65 years, and were primarily White. The use of household sample weights produced an analytic sample of 10,181,443 adults with functional hearing loss. Additional sample characteristics for both the weighted ACS sample and those reporting functional hearing loss are presented in Table 1.

Table 1. Characteristics of the 2016 American Community Survey analytic sample.

Characteristic	Total	Functional hearing loss
Unweighted sample	2,348,374	120,286
Weighted sample	224,740,270	10,181,443
Age (years)
64 and younger	80.03%	35.84%
65 and older	19.97%	64.16%
Race
White	75.82%	85.40%
Black	11.46%	6.88%
Asian	5.69%	2.90%
Hispanic	4.71%	2.35%
Other/multiple^a	2.32%	2.46%
Sex
Male	47.67%	58.84%
Female	52.33%	41.16%
Educational attainment
Less than Bachelor’s	70.43%	80.17%
Bachelor’s or higher	29.57%	19.83%
Geographic region
Midwest	21.52%	22.32%
Northeast	17.93%	15.83%
South	37.07%	38.84%
West	23.47%	23.01%
Annual income	Median: $60,000 IQR: $30,000; $105,000	Median: $43,200 IQR: $21,800; $78,200

Source: Integrated Public Use Microdata Series: Version 8.0, American Community Survey 2016 survey data.

Notes: Percentages are based on weighted data. Numbers might not add to 100% due to rounding.

^a Designation includes race categories not listed here and those who indicated multiple races.

Economic analyses

We applied two approaches to determine affordability of hearing aids [26]. First, the catastrophic approach determined the proportion of the population for which the price of a hearing aid would exceed a predetermined percentage of income. A hearing aid at a price of $P$ was considered unaffordable if $P\ge CI,$ where $C$ was the percentage of income considered to be catastrophic, and $I$ was the person’s annual income. The reference catastrophic threshold was ≥3% of annual income, as proposed by the World Health Organization [30]. Second, the impoverishment approach determined the proportion of the population whose income would fall below a given poverty standard for the year after deducting the purchase price of a hearing aid. The impoverishment approach calculated what the poverty rate would be if everyone hypothetically purchased a hearing aid at a given price of $P.$ A hearing aid was considered unaffordable if $RM\ge I-P,$ where $R$ was the poverty line, given the number of individuals in the person’s household, and $M$ was the multiplier being considered (such as 150% of the poverty line). Analyses yielded the proportion of individuals for whom the hearing aid is unaffordable under different values of $P, C$ and $M.$

The reference catastrophic threshold was 3%, while the impoverishment approach used a reference point of 100% of the 2015 US FPL adjusted for household size [36]. By 2015 standards, 100% of the FPL was equivalent to $11,770 in a one-person household plus $4160 per additional family member [36,37]. The 2015 US poverty guideline was applied since 2016 ACS data reflected incomes from both 2015 and 2016. Of note, 100% of the US FPL is lower than the qualifying income threshold for Medicaid with some states at 138% [37]. The reference value for cost was an average selling price of $2500. The assumptions of this approach required determination of one hearing aid as a minimum acceptable quantity of the good. However, monaural hearing aid use is less common and most bilateral and/or age-related hearing losses merit two hearing aids [18].

Sensitivity analyses were conducted by varying catastrophic thresholds (3%, 5% and 10% of annual income), impoverishment thresholds (100%, 150% and 200% of the US FPL) and prices of the hearing aids ($250 and $500 to $3500 in $500 increments). Sensitivity analyses included prices lower than the current average cost of $2500 for at least three reasons. First, one of our objectives was to determine costs at which purchase of a hearing aid would be more affordable. Second, households facing poverty due to hearing aid purchase will likely select less expensive models if available. Third, over-the-counter hearing aids are likely to be less costly than current devices available on the market.

Statistical analyses

After determining affordability of hearing aids, Chi-square tests of independence were used to compare the presence or absence of affordability issues by demographic variables (i.e., age, sex, race, educational attainment and geographic region). Age was dichotomized to <65 years and ≥65 years, and educational attainment to less than a bachelor’s degree or completion of a bachelor’s degree or greater. Race was categorized into mutually exclusive categories (i.e., Black, Asian, Hispanic, Other/Multiple and White). US Census Bureau geographic classifications included Midwest, Northeast, South and West [38].

Results

Affordability

The prevalence of affordability issues for adults with functional hearing loss under the reference cost of $2500 are presented with results from sensitivity analyses in Table 2.

Table 2. Prevalence of hearing care affordability issues for adults with functional hearing loss at an average price of $2500 using the catastrophic and impoverishment approaches, 2016 American Community Survey.

Catastrophic approach
Catastrophic threshold (≥ % of annual income)		Prevalence of catastrophic expenditure		Population experiencing catastrophic expenditure (Npost)
3*		77.32%		7,872,292
5		56.35%		5,737,243
10		29.56%		3,009,635
Impoverishment approach
Poverty rate (≥ % US FPL 2016)	Baseline poverty rate (Ipre)	Post-purchase poverty rate (Ipost)	Change in prevalence of impoverishment (Idiff)	Population impoverished at baseline (Npre)	Population impoverished post-purchase (Npost)
100*	13.97%	18.13%	4.16%	1,422,348	1,845,896
150	26.15%	30.15%	4.00%	2,662,447	3,069,705
200	37.60%	41.19%	3.59%	3,828,223	4,193,736

Sample with Functional Hearing Loss (N = 10,181,443).

*Reference threshold.

FPL: federal poverty level; US: United States.

Out of the weighted sample representing 10,181,443 adults with functional hearing loss, the base case indicated that 18% (N = 1,845,896) would be at or below 100% of the FPL for the year, and 77% (N = 7,872,292) would spend 3% or more of their annual income on the purchase of just one hearing aid at a reference price of $2500.

The proportions of the sample with functional hearing loss estimated to experience catastrophic and impoverishing hearing aid expenditures at different price points are presented in Figures 1 and 2, respectively.

Figure 1. Proportion of adults with functional hearing loss in the 2016 American Community Survey (N = 10,181,443) with catastrophic hearing care expenditure, by price. Source: Authors’ analysis of American Community Survey, 2016. Notes: Reference values for the present analysis are ≥3% of annual income and $2500 in hearing aid cost.

Figure 2. Proportion of adults with functional hearing loss in the 2016 American Community Survey (N = 10,181,443) with impoverishing hearing care expenditure. Source: Authors’ analysis of American Community Survey, 2016. Notes: Reference values for the present analysis are ≥100% of the United States Federal Poverty Level and $2500 in hearing aid cost.

The results of sensitivity analyses of affordability thresholds demonstrated expected relationships between the prevalence of affordability issues and the independent variables. An indirect relationship was observed under the catastrophic approach such that as the threshold percentage increased from the reference 3%, the prevalence of affordability issues decreased. For the impoverishment analysis, a direct relationship was observed where prevalence of affordability issues increased as the impoverishment threshold was raised above 100%. Lastly, the prevalence of affordability issues decreased as cost decreased under both types of analyses. The largest proportional reduction of affordability issues in the reference cases occurred between $1000 and $500 for the catastrophic analysis and between $1500 and $1000 under the impoverishment approach.

Demographic differences in affordability

Differences in hearing aid affordability by sociodemographic characteristics are presented in Table 3. Chi-square tests of independence indicated that all demographic variables – age, race, sex, educational attainment and geographic location – were significantly associated with differences in affordability outcomes (p < 0.0001). Older adults (i.e., 65 years and older) had proportionately more affordability issues compared to their younger counterparts under both approaches. Affordability issues were more prevalent among those with educational attainment less than a bachelor’s degree and varied significantly by race and geographic region. Females had disproportionately higher rates of affordability issues compared to men.

Table 3. Sociodemographic differences in hearing care affordability for adults with functional hearing loss in the 2016 American Community Survey.

		Catastrophic criteria (≥3% annual income)			Impoverishment criteria (≥100% US FPL)
Characteristic	Total	Affordable	Not affordable	p Value	Affordable	Not affordable	p Value
Weighted sample (N)	10,181,443	1,087,202	9,094,241	–	8,335,213	1,846,230	–
Weighted sample (%)^a	4.53	10.68	89.32	–	81.87	18.13	–
Age (years)
64 and younger	35.84	42.82	35.00	<0.0001	33.54	46.18	<0.0001
65 and older	64.16	57.18	65.00		66.46	53.82
Sex
Male	58.84	65.33	58.06		61.26	47.89	<0.0001
Female	41.16	34.67	41.94	<0.0001	38.74	52.11
Race
White	85.40	87.19	85.19	<0.0001	87.66	75.21	<0.0001
Black	6.88	3.68	7.26		5.47	13.22
Asian	2.90	5.94	2.54		2.75	3.58
Hispanic	2.35	1.37	2.47		1.98	4.03
Other/multiple	2.46	1.81	2.54		2.13	3.96
Education
<Bachelor’s	80.17	54.25	83.27		77.60	91.76
Bachelor’s or higher	19.83	45.75	16.73	<0.0001	22.40	8.24	<0.0001
Region
Midwest	22.32	18.69	22.76	<0.0001	22.68	20.74	<0.0001
Northeast	15.83	18.52	15.51		15.93	15.38
South	38.84	35.62	39.22		38.12	42.06
West	23.01	27.17	22.51		23.27	21.81

Source: Authors’ analysis of American Community Survey, 2016.

Notes: Percentages are based on weighted data. Numbers might not add to 100% due to of rounding. Chi-square analyses (alpha = 0.05) used the weighted analytic sample. Other/Multiple race category includes those not listed here and those who indicated multiple races. United States (US) Federal Poverty Level was defined by 2015 Standard (US Department of Health and Human Services, 2015), adjusted for household size.

^aValues represent the percentage of total American Community Survey (ACS) 2016 weighted study sample with functional hearing loss.

A limitation to the present study pertains to generalizability to the entire adult population with hearing loss. Specifically, the ACS hearing question was used to identify a representative sample of adults who experience a disabling hearing difficulty. It is possible that the ACS hearing question did not identify individuals with milder hearing losses who may benefit from hearing aids. Nevertheless, adults with functional hearing loss constituted 5% of the overall ACS sample, identical to the global prevalence of disabling hearing loss which is also estimated to be 5% [39]. In addition, participants with missing income data were excluded from the study and belonged to groups that reported lower earnings, which likely underestimated the prevalence of affordability issues among our sample.

Discussion

Our results indicated that a hypothetical out-of-pocket purchase of one hearing aid, much less two, would be unaffordable for many adults with functional hearing loss. According to the catastrophic reference case (3% of annual income), the cost of one hearing aid and associated services would constitute a burdensome health care expenditure for more than three-quarters of American adults with functional hearing loss. Under the impoverishment analysis, four out of every 25 adults with functional hearing loss would fall below 100% of the US FPL for the year because of these out-of-pocket costs. Considering the baseline poverty rate at 100% of the US FPL, the hypothetical purchase would result in an additional 4%, or over 400,000 individuals, falling below the US FPL for the year. It should be noted that the purchase would be considered unaffordable at any price for the 14% who were already below the US FPL at baseline. Further, our results can also be interpreted in a generic manner, where any health care cost of $2500 would result in the same rates of affordability issues (e.g., over-the-counter hearing aid, insurance deductibles and copayments).

Age, sex, race, geographic location and educational attainment were also significantly associated with affordability outcomes and may be due to differences in income distributions across groups [40,41]. Affordability issues also varied significantly by geographic region. It is not surprising that higher rates of affordability issues would occur where median annual incomes are lower. From a policy standpoint, it should be noted that the geographic regions experiencing higher rates of hearing care affordability issues are also where state-level Medicaid coverage determinations for hearing health care are notably poor [42]. Findings of our study confirmed that affordability disparities exist in certain sociodemographic groups. For example, non-White groups may be more likely to experience higher rates of financial hardship due to out-of-pocket expenses for hearing aids. Low rates of hearing aid affordability among minority populations may constitute a significant barrier to accessibility and were consistent with previous studies indicating low rates of hearing aid use among these groups [43,44].

Sensitivity analyses of cost identified a proportionately larger reduction in affordability issues between $1000 and $500 under the catastrophic approach and between $1500 and $1000 for the impoverishment approach. These can be considered reasonable price ranges where affordability of hearing aids may be maximized through cost reduction. Expansion of Medicare coverage of hearing aids would likely drive down hearing aid cost of goods via bulk purchasing. For example, hearing aid purchases from the Veteran’s Health Administration constitute over a quarter of all hearing aid sales in the US and have negotiated hearing aid costs as low as $360 per device [45].

Cost reduction alone does not guarantee that individuals with hearing loss will seek treatment. Previous consumer surveys have found that willingness to adopt hearing aids would more than double if (1) the out-of-pocket cost did not exceed $500 or if insurance contributed $1000 per hearing aid, or (2) if insurance provided full coverage [46]. Indeed, only one in ten with mild hearing loss procures hearing aids, compared to four in ten among adults with more severe degrees of hearing problems [46]. With 37% of hearing losses being mild in severity [1], coverage of hearing aids and associated services would likely encourage proactive hearing help-seeking earlier in the disease process.

Successful management of communication difficulties employs a combination of amplification devices and rehabilitative hearing-care services. The increasing prevalence of older individuals with hearing loss will need to communicate effectively in a variety of settings to avoid disruptions in activities of daily living. Poor accessibility to hearing care raises concern about the potential downstream health effects of leaving hearing loss unaddressed. Moreover, adults have increased health care expenditures as they live longer [16,47,48] possibly placing them at greater risk for affordability issues when seeking hearing care. Future health policies should also address affordability disparities in specific sociodemographic groups, particularly among the Medicare-eligible population.

Hearing loss has long been perceived as a benign characteristic of aging, but when left untreated, it negatively impacts cognitive, functional, social, emotional and economic outcomes. Lack of Medicare coverage for hearing care seems inconsistent with American health goals under HealthyPeople 2020 [21], as well as recommendations from various scientific panels [17,19,20]. The creation of a new classification of lower cost hearing aids under the Over-the-Counter Hearing Aid Act of 2017 may increase the accessibly to and affordability of amplification for those with hearing loss. However, non-coverage of rehabilitative hearing care services could constitute a barrier to help-seeking for adults whose communication goals are not met by devices alone. Policy efforts should seek to reduce out-of-pocket costs for adults with hearing impairment and assure access to rehabilitative services and hearing aids to mitigate the deleterious effects of hearing loss on overall health and well-being across the lifespan.

Acknowledgements

The authors extend heartfelt gratitude to those who provided expertise, assistance and support in the concept, conduct and dissemination of this study: Kortney Bush, Jeffrey L. Danhauer, Jessica Huddleston, Mary Hudson, Andrew B. John, Catherine Palmer, Jin Hyung Park, Nicholas S. Reed, Emily Smith, Amber Willink and Ying Zhang.

Disclosure statement

The authors have no conflicts of interest to report.