Trends in U.S. Hearing Aid Coverage and Access: From Medicare to OTC and AirPods

The U.S. health coverage system is complex and fragmented. Access to hearing aids and hearing-related services and treatments is affected by a mix of federal programs, state mandates, and commercial insurance options. This variety creates uneven coverage, with significant differences in benefits depending on a person’s age, income, or geographic location.

This year, specific to hearing health, we continue to see evolving coverage policies, shifting enrollment due to a rapidly expanding aging population, and a growing interest in overall health and well-being. Alongside the evolving coverage landscape, we can take stock of a more mature (yet not robust) over-the-counter (OTC) hearing aid market and consistent growth in the prescription hearing aid space.

In this article, we provide an overview of U.S. hearing aid distribution, current trends, and some of the major factors that may contribute to future changes in the system.

Federal programs for hearing healthcare coverage

At the federal level, Medicare provides healthcare coverage for Americans 65 and older. There are two program options: Original Medicare and Medicare Advantage.

Original Medicare

Under Original Medicare, a fee-for-service coverage option with over 33 million enrollees, hearing aids and related services are statutorily excluded from coverage. The Social Security Amendments of 1965 (also known as the Medicare and Medicaid Act) explicitly excluded hearing aids from Medicare coverage, meaning Congress would have to act for them to be included. However, Original Medicare does provide cochlear implants and osseointegrated devices, as well as diagnostic services, for those who meet specific criteria.

Over several sessions of Congress, multiple bills have been introduced to provide or allow for hearing aid and related services coverage under Original Medicare. The most notable of these was the Build Back Better Act in 2021, which passed the U.S. House of Representatives but failed by a single vote (Sen. Joe Manchin, D-WV) in the U.S. Senate. Although vision, hearing, and dental care coverage were part of the original bill, only hearing remained in the final version when it passed in the House.

Medicare Advantage

Medicare Advantage (MA) is a private health insurance plan in which Medicare pays a set amount per person to the MA plan, with beneficiaries paying any additional premiums. MA plans include the benefits of Original Medicare and typically offer additional (or “supplemental”) benefits, such as hearing, dental, and vision.

MA has grown in popularity with over 34 million enrollees, or over half of the total Medicare population (Figure 1). Nearly all MA plans offer some type of hearing benefit, including hearing aids and hearing services.

As the aging population in the U.S. continues to grow significantly and the costs of Medicare Advantage increase, U.S. policymakers are scrutinizing the provision and utilization of benefits for beneficiaries, as well as the use of prior authorization and high rate of claims denials across MA plans.

One concrete regulatory step taken by the Centers for Medicare and Medicaid Services (CMS) is to require MA plans to notify beneficiaries of unused supplemental benefits on an annual basis. This “Mid-Year Enrollee Notification of Unused Supplemental Benefits” must include information on how to access benefits, the scope of benefits, and other applicable requirements.

While oversight action is expected to continue, hearing, dental, and vision remain the most popular and core supplemental benefits offered through MA plans.

Medicaid

For low-income individuals, Medicaid provides federally-funded health coverage that is administered by states. Hearing care services for children are covered nationwide, but only approximately 32 states offer hearing health coverage or hearing aids for adults, and the specifics vary. For example, states differ in how they define “medical necessity,” what types of devices are covered, and how often they can be replaced.

The VA and hearing care

The U.S. Department of Veterans Affairs (“VA”) provides comprehensive hearing services for veterans and accounts for about 20% of the U.S. hearing aid market. Veterans enrolled in the VA health system can access audiology and hearing aid services in VA facilities and through remote locations, where they may receive evaluations, hearing aids, repairs, and batteries at no cost, depending on eligibility. The VA offers state-of-the-art, premium hearing aids and related services, reflecting the high prevalence of auditory disorders among veterans.

Hearing loss and tinnitus, affecting nearly 1.5 million and 3 million veterans, respectively, are often linked to service-related causes, including blast exposure, traumatic brain injuries, and noise trauma.¹ In addition to traditional, premium hearing aids, veterans have access to cochlear implants and osseointegrated devices.

State and commercial coverage for hearing aids and related services

State-level mandates for hearing aid insurance coverage are sparse and inconsistent. Fewer than 10 states require insurers to offer any level of hearing aid coverage for adults, and where mandates do exist, they often apply to a limited subset of insurance plans.

Commercial insurance also plays a role in hearing health coverage, with programs offered and administered through third-party administrators or hearing benefits managers under large insurers. Again, coverage specifics vary widely by plan and location. Should we see gridlock at the federal level of policymaking, more states may consider imposing their own coverage mandates for hearing aids and services.

Political and policy factors

Policy changes that could significantly impact hearing health are largely driven by the U.S. Congress. However, with the lame-duck session and what appears to be a slim Republican majority, there is little momentum for major reforms in the health policy space.

Following the November 2024 elections, a new administration led by President-elect Donald Trump will begin in January 2025. Under his second term, the first 100 days of his domestic policy are expected to focus mainly on taxes, immigration, and energy.

It remains to be seen what health policy-specific priorities may be pursued and what changes are anticipated at the regulatory level. Depending on federal action or direction, states may choose to pursue hearing health coverage-specific policies.

OTC hearing aids and the U.S. delivery system

The introduction of over-the-counter (OTC) hearing aids in 2022 has been another relatively new development in the U.S. hearing health market. While this move was initially seen as a potential “revolution” in access to and affordability of hearing aids, early market trends suggest a more gradual shift. Some companies have entered the OTC market, while others have exited, and consumer education remains critical in helping people navigate this new and complex landscape.

The hearing health market has several purchase models, including prescription, OTC, and now software as a medical device. Currently, there are six individual product codes established by the U.S. Food and Drug Administration (FDA) for OTC and prescription devices (see Table 1 below). Each code has specific markets in which they can be sold, and importantly, the codes display the number of companies that are currently registered in each of these categories. As shown below, there are over 360 individual entries in the FDA database related to prescription and OTC hearing aids.

Self-fitting OTC devices (product codes QDD and QUH) are subject to additional submission requirements, such as a 510k submission, prior to market introduction. Under the 510k process, the company must submit specific data showing that the device is safe and effective, as well as information regarding the user’s ability to use and control it.

While OTC hearing aids offer another pathway for individuals with hearing loss, growth in the traditional prescription hearing aid market remains steady. Further, consumers continue to value the guidance of hearing professionals in the evaluation of hearing loss and through the hearing health process.

While there is a gap in user and sales data in the OTC space, the current OTC user has been reported to be younger and interested in a simpler process to obtain hearing assistance (e.g., avoiding multiple appointments or going in-person to an office to obtain a device, preferring instead to fit devices in their home). Further, many OTC consumers are reportedly situational wearers, where they have specific listening environments in which they experience hearing difficulty (e.g., restaurants, gatherings, business meetings).

There has been much speculation regarding OTC sales, with unit volume estimates ranging from 200,000 to 1 million devices, compared to well over 5 million prescription hearing aids. However, the high return rate—reportedly ranging from 35-50%—and the lack of a consolidated reporting entity make the exact number of net OTC hearing aid units sold difficult to ascertain.

Factors leading to a less robust OTC hearing aid market and reportedly high return rates may include low satisfaction with sound quality, limited or no post-purchase or post-fitting support, and other issues. Although the OTC market is only two years old and continues to evolve, many OTC hearing aids with attractive features (e.g., rechargeability, Bluetooth connectivity, directional microphones, telecare services, etc.) come with price tags that approach lower-cost prescription devices that also offer in-person hearing care.

Apple AirPods Pro 2 software and OTC hearing aids

One of the latest entries into the OTC and hearing health market involves a new product code for “software as a medical device” with the approval of the Apple OTC hearing aid software to be included in its AirPods Pro 2 device. It is important to note that the software is the medical device feature, not the AirPods themselves.

Under this platform, a hearing test is available on the user’s iPhone, and the test results can be used to modify or program certain features within the AirPods to the user’s hearing loss, as well as provide additional hearing health features such as loud noise notifications. It remains to be seen what impact this announcement may have or if we will see additional filings under this new code.

Limited enforcement of newly established OTC regulations

A continuing area of concern related to OTC hearing aids is bad actors operating in this space. Examples of bad actors include failing to register establishments or listing devices with the FDA, making unsubstantiated claims regarding their devices, and utilizing misleading advertising as it relates to the devices.

Problematic registrations or listing of OTC hearing aids include examples of devices claiming to be “self-fitting” when they are not appropriately listed as such. Or, the inverse, where a device is listed as a preset OTC but includes features, tools, tests, or software that indicate it is self-fitting.

Instances of misleading claims and misleading advertising include suggesting that the product is appropriate for “all levels of hearing loss” or “severe to profound hearing loss” when OTC is specifically limited to self-perceived mild to moderate hearing loss.

Further, there are occurrences of certain bad actors using the FDA logo in their advertising or stating that their devices are “FDA-approved.” These actions may contribute to increased consumer confusion and dissatisfaction. However, to date, there has not been significant enforcement action taken against these bad actors.

Trends in traditional dispensing via licensed hearing care professionals

By far, the largest proportion of hearing aids sold in the U.S. are prescription devices from the retail offices, clinics, hospitals, and private practices of audiologists and hearing aid specialists, as well as at the VA and membership warehouse retailers like Costco and Sam's Club. In terms of market distribution, hearing care professionals may fit, dispense, and sell both OTC and prescription devices. There are retail stores (e.g., Walmart and Best Buy) and several pharmacy chains (CVS and Walgreens) selling OTC hearing aids either in-store or online as well.

One emerging hearing aid distribution system could be the direct market, in which hearing aid specialists and audiologists sell prescription and OTC devices directly to consumers via telehealth. There already are several direct-to-consumer companies; it's conceivable this market could expand further by these same companies as well as by independent practices and dispensing networks offering their own telecare services.

Direct dispensing of hearing aids using telehealth would likely become easier once the final guidelines for the Audiology & Speech-Language Pathology Interstate Compact (ASLP-IC) are published. The ASLP-IC is an interstate compact, or formal agreement among states that facilitates the interstate practice of audiology and speech-language pathology. Under the ASLP-IC, audiologists and speech-language pathologists who are licensed and in good standing in a compact member state will be eligible to practice in other compact member states via a “compact privilege,” which is equivalent to a license. Having the compact privilege will make it easier to fit and support patients with hearing aids living or traveling to a state other than the home state of the audiologist.

As of this writing, 34 states have enacted ASLP-IC legislation to participate in the compact. However, the ASLP-IC is not yet operationalized, meaning the process to apply for and receive compact privileges is in the works. It is expected to be available in 2025. Additionally, an extension of telehealth flexibility first implemented during the COVID-19 pandemic could provide another pathway to hearing health services.

Hearing education and awareness efforts are critical for empowering consumers

As the U.S. market and policy landscape evolves, we continue to see consistent growth and increasing adoption rates, as well as validation of the important role of the hearing professional and support when adopting hearing technology. In 2025, we will release the results of the latest MarkeTrak survey, which collects data on the estimated incidence of hearing loss in the U.S., demographics related to hearing aid use, satisfaction with devices and professionals, new user rates by age, health effects of hearing loss, and more.

At its core, education and awareness efforts remain critical to empower consumers to understand their hearing health, address hearing loss, and make informed choices to enhance their overall health and well-being. As we work to dispel lingering stigma or misperceptions of hearing technology, it is important to highlight the value of hearing loss solutions in maintaining independence, improving social engagement, and lowering the risk of associated health issues such as cognitive decline and depression. HIA sponsors the Hear Well campaign, which provides a suite of shareable resources, including graphics, videos, and source information, to assist both consumers and hearing professionals in engaging on the importance of addressing hearing loss.