Washington, D.C. — With healthcare costs top of mind for millions of Americans, the American Economic Liberties Project  today released a new report, Within Earshot: Overcoming Barriers to Over-the-Counter Hearing Aid Access, analyzing why bipartisan rules finalized during the Biden administration that permit hearing aids to be sold over the counter have not yet translated into widespread consumer adoption. Written by former Biden administration White House and Federal Trade Commission officials Hannah Garden-Monheit and Bharat Ramamurti, as well as Economic Liberties Senior Policy Analyst for Healthcare, Emma Freer, the piece looks closely at how industry consolidation, conflicts of interest, and gaps in insurance coverage continue to keep lower-cost devices out of reach for millions who could benefit.

The report presents ways federal and state policymakers can improve adoption, including tackling vertical integration in the hearing health market and expanding coverage through programs like Medicare.

“Removing regulatory barriers alone wasn’t enough to truly open up the market and make hearing aids cheap and accessible for all,” said Hannah Garden-Monheit, former Director of Competition Council Policy at the White House. “Policymakers must go further to address the structural barriers and entrenched industry consolidation that continue to keep low-cost, high-quality hearing aids out of the hands of millions of Americans with hearing loss.”

About 15% of American adults—37.5 million people—report some trouble hearing, which can lead to serious diseases like dementia. But as of 2016, only 20% of people who had hearing loss actually used hearing aids, due to prohibitively high prices maintained by a cartel. Meanwhile, independent audiologists paid far more for the devices as major corporate audiologists that cooperated with the cartel, such as Costco.

In 2017, following decades of advocacy from public interest groups, Congress acted, passing Elizabeth Warren and Chuck Grassley’s Over-the-Counter Hearing Aid Act, which ordered the FDA to create rules allowing the sale of hearing aids without a prescription. The FDA, however, did not follow through on its mandate until President Biden’s Competition Executive Order provided a deadline for the FDA to implement the law. In 2022, a final rule allowing for over-the-counter hearing aids took effect.

Since then, the price of hearing aids has dropped by as much as $3,000 per pair, and some new manufacturers, including Apple, have entered the market. However, even the lower prices remain too high for millions of Americans, particularly because Medicare does not cover hearing aids. Additionally, Sonova, WS Audiology, Demant, GN, and Starkey, continue to control the lion’s share of both the U.S. and global hearing-aid markets, and their ownership of clinic chains and hearing-benefit managers gives them the ability to steer patients toward high-priced prescription devices. This structure, the report explains, limits the reach of OTC products.

The report also calls on federal agencies to increase consumer awareness around OTC products, ensure meaningful comparison shopping tools, and end pricing structures that obscure the cost of devices. In addition to calling for Medicare to cover hearing aids, the authors argue that federal employees should have access to OTC hearing aids through their benefit plans — a step that would expand access to the use of lower-cost devices.

Read the full report, Within Earshot, here.

Learn more about Economic Liberties here. 

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The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.