Wednesday, December 19, 2007

Why Insurance Companies Don't Pay For Hearing Aids

Toni Brayer MD of EverythingHealth asks the question, Why won't insurance companies pay for hearing aids? It's a good question and its implications are more far-reaching than you might think.

Click here for my feelings on this.
Toni Brayer MD of EverythingHealth asks the question, Why won't insurance companies pay for hearing aids? It's a good question and its answer has implications more far-reaching than you might think.

The obvious response would be unadulterated avarice. But if that were the case, then insurance companies wouldn't pay for anything related to health. They'd just collect your premiums. While insurance companies may try to minimize the amounts they pay out, we all know that they must pay for something to maintain credibility (and not be sued for fraud). So something else must be happening here. And it has to do with the very essence of what "insurance" actually is.

There's nothing magical about how the insurance industry works. Its raison d'être has always been to spread the expenses of a rare, known risk from a small number of people to many people. This way, everyone pays a manageable amount so that no one person has to pay a huge amount.

If my house burns down, I don't want to face the catastrophic expense of paying for a new house and its contents (and going broke in the process). So I buy homeowners insurance. I'll probably never make a claim because my house probably won't ever burn down. However, I sleep better knowing I'm insured for that unlikely event (also my mortgage lender makes me do it but that's another issue).

This is insurance in its classic sense. There are other issues involved but this is the basic concept. I'll leave it as an exercise for the reader to guess why policies exclude "acts of war" from their coverage for example.

Because having my house burn down is a rare event, fire is an insurable risk. Likewise, getting seriously ill occurs relatively infrequently rendering this an insurable event.

Compare this with getting "home improvement" insurance. Have you ever seen it? No, and the reason is that if you purchased some, the likelihood of you using it is virtually 100%. Who wouldn't opt to replace the kitchen cabinetry if your insurance paid for it? No one. So from the point of view of the insurer, the chance of a policy holder sending in a claim for a home improvement doesn't represent a risk so much as a certainty.

So a home improvement, in contrast with a home fire, is not an insurable risk. For the company to be able to pay off such claims, the premiums would have to equal the average cost of home improvements plus administrative costs plus the additional cost of a profit. No customer would want to pay for such a policy and no insurance company would therefore offer it.

Now we come to the issue of hearing aids. Let's divide hearing loss victims into two groups: the elderly and the young. First, let's discuss seniors.

Approximately 30% of all Americans 65 and older and 40 to 50% of those older than 75 suffer from hearing loss (NIH statistics). These prevalence rates are so high that no insurance company can rationally consider hearing loss an insurable event. The risk is simply too high to make it financially viable.

Of course the insurance company could choose to spread the risk of paying for hearing aids to younger patients thus enlarging the risk pool. The problem with this is that the younger people are then paying substantially for coverage they have very little likelihood of ultimately requiring. It wouldn't be so much insurance as a simple gift to the older-aged risk pool.

Sure, Congress can step in and write laws that force insurance companies to pay for such benefits. That would be the simple solution and the morality of such laws is certainly open for discussion. But make no mistake, the end result of this approach would simply be to mandate such gift-giving from the young to the old.

Insurance companies want to be able to compete with each other for young people's premiums. Those that refuse to force younger policy holders to foot the bill for older ones will clearly have a competitive advantage. The end result? Insurance companies won't cover hearing aids in the elderly unless the government forces them to.

This really gets at the heart of one of the biggest problems with health insurance. Insurance was originally conceived to cover so-called catastrophic events like a major surgery or a lengthy hospitalization. These are extremely expensive, though relatively uncommon events like having your house burn down or totaling your car. Unfortunately for complex reasons, people demand insulation from all health care expenses. I've had patients complain to me that they spent hours on the telephone with claims people and they bombard me with "doctor's forms" to fill out so they could get their insurer to pay for a thirty dollar quad cane. Also, patients resent even minimal co-payments for office visits.

The problem is that when health plans cover the smaller (and decidedly un-rare) events such as minor equipment like quad canes and office visits, insurance ceases to be insurance and more like pre-payment instead. So when you add to these completely expected expenses things like administrative costs and a profit mark-up, premiums become needlessly high. With this extra overhead, it would be like buying a gift coupon for yourself at a store and paying more for it than its face value. Who would do that?

This is why many people concerned about health care finance (myself included) advocate moving back towards true catastrophic health insurance and away from insular insurance.

Regardless, this still leaves the question of why insurance won't cover the cost of hearing aids in young patients. To me, this is a very interesting problem. Hearing loss is much less common in young people. For this reason, one would think this risk to be quite insurable and easily distributed. It doesn't make sense that it's not covered unless something else is going on here.

My guess? Age discrimination laws. I believe the insurance companies would rather not cover hearing aids for anyone than have to explain to older policy holders and various regulatory bodies why they provide them for the young but exclude seniors. Trust me, no one relishes the thought of going toe-to-toe against AARP and trying to justify a bias against older patients!

How would I like to see this handled? At the risk of being politically incorrect, I'd like to see a law specifically excluding the insurance companies from age discrimination regulation and lawsuits regarding their coverage of hearing aids. The likely result of such a law would be to permit the industry to cover hearing aids for the young (insurable) and continue to exclude seniors (noninsurable).

Sounds harsh and I hope my mother doesn't try to run me over when she reads this; but I think things will still be better than the way they are now. If anyone has other ideas about this I'd love to hear about them.

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27 Comments:

Blogger Toni Brayer MD said...

John, I like posing the question and subsequently reading your thoughtful assessment and answer. I agree with you about the need for insurance to cover catastrophic and expensive events rather than "maintenence" I also agree with your politically incorrect solution of covering children with hearing loss and letting seniors pick up their own hearing aids. Great post and thanks for the mention of EverythingHealth.

December 19, 2007 10:24 AM  
Blogger H G Stern, LUTCF, CBC said...

Great post!

I esp appreciate your "home improvement insurance" idea; I may end up stealing that :-)

December 19, 2007 6:55 PM  
Blogger Michael Rack, MD said...

Health insurance today has very little resemblance today to the old concept of coverage for catastophic illness. Thank you for posting this; I agree with your post but think that it is only a partial explanation of why hearing aids are not covered. After all, hypertension has a similar prevalence yet it is considered an insurable event. To add to your explanation, I would suggest that hearing aids are lumped in with eye glasses, dentistry, and (partially) psychiatry to being separate from the rest of medicine and therefore not covered by standard medical insurance policies (Medicare pays 50% of the allowable charge for psychiatric diagnoses vs 80% for medical diagnoses).

December 20, 2007 7:56 AM  
Blogger Mark said...

Though Medicare will not cover the expense of hearing aids...it will cover most/if not all the expense of a surgery costing over $100,000.00 - A cochlear implant!

I guess this goes back to the time when our Government would prefer to spend thousands of dollars for one toilet seat.

Just think of the number of hearing aids Medicare could purchase!

Our same government through the use of VA Benefits covers hearing aids. I do not understand why Medicare cannot provide the same benefits, especially when most Medicare beneficiaries pay a monthly premium!

December 20, 2007 8:27 AM  
Anonymous spike said...

How do you think Homeowner's Insurance Companies would react if there were certain improvements you could make to your home that would greatly reduce the likelihood of you ever filing a claim? They would help you pay for them.

I just activated a monitored alarm system for my home, and received a substantial discount off my homeowner's insurance. Why? Because they know they'll save money in the long run by doing that.

I would be happy to pay for primary care out of pocket as long as I still get the benefits of group discounts negotiated by insurance companies. But, is this a good deal for the insurance companies? We know that 70% of medical expenses are driven by 10%-15% of the population with chronic illnesses. We also know that preventive maintenance of chronic conditions can save money in the long run by eliminating costly ER vists and invasive procedures. Because costs are driven largely by hospital procedures and because Primary Care has the ability to greatly reduce the number of hospital procedures required, covering Primary care is akin to my homeowner's insurance giving a discount for activating a monitored alarm system.

December 20, 2007 8:48 AM  
Anonymous Anonymous said...

Let's correct a few misconceptions:

"Though Medicare will not cover the expense of hearing aids...it will cover most/if not all the expense of a surgery costing over $100,000.00 - A cochlear implant!"

Sounds like a justifiable rant, but in fact Medicare would not cover a cochlear implant in a patient who was a candidate for the (non-covered) hearing aid. By definition that patient would not be a candidate for a hearing aid.

A more apt complaint would be that the average insurer would not cover a hearing aid in a patient who elected not to have an operation which could potentially free him from the need for a hearing aid -such as a Stapedectomy, which costs considerably less than an aid. the problem for the insurere wuolc be that siad individual might likely need SEVERAL hearing aids over his lifetime,along with all the labor intensive costs of fitting and servicing, whereas a successful stapedectomy would not likely result in a need for revision surgery. (I do not wish to debate the pros and cons of risks and complications related to surgery vs non-invasive treatment. We're speaking of dollars and cents here.)

"Because costs are driven largely by hospital procedures and because Primary Care has the ability to greatly reduce the number of hospital procedures required, covering Primary care is akin to my homeowner's insurance giving a discount for activating a monitored alarm system."

I think it's important to clarify the nebulous term "procedures." Does the writer mean Echo's, cath's, endoscopies, or is he also referring to operations? There is simply no way that any measure of primary/preventive care will avoid the need for a thyroidectomy or an operation for a fractured hip.

December 20, 2007 11:03 AM  
Anonymous Latin for Star said...

Contrary to your research, hearing aids are covered by numerous insurance carriers. The plans are usually customized of course, and tailored to an employer’s exact need/wants. Most of the employees working for the company that request such benefits have an issue with noise pollution on the job. Having the benefit through the insurance company is less expensive than the Workers’ Compensation claims which can cost astronomical amounts if the state is worker friendly.

December 20, 2007 11:13 AM  
Anonymous Anonymous said...

As an employee in an industry that has a high noise pollution level I an surprised that our insurance carrier does not cover hearing aids. My very basic non-medical question to the insurance companies is why not cover hearing aids to avoid other lack of adequate hearing related accidents? If I get hit by a car because I don't hear the horn the resulting medical care will be covered at a far greater amount. Seems like common dollars and sense to me. By allowing coverage of the hearing aids I am sure that many accidents could be avoided. At approxinately $3,000 for average aids for both ears, life expectancy of 3-5 years, approximately $100 for batteries a year I will have put about $20,000 into this and that is not accounting for inflation. One avoidable accident at home or work will cost considerably more.
Hard of hearing and confused in Georgia

January 06, 2008 6:28 AM  
Blogger Amie said...

Not sure I agree that hearing aid aren't covered because hearing loss is so common. All phases of maternity are covered, and that's pretty common. And the cost is spread to people who will never have children as well as those too old to have them. So why not spread hearing aid costs to the young?

February 13, 2008 5:46 PM  
Blogger The Medicine Man said...

Amie,

Any insurance company that refused to cover the expenses of pregnancy and delivery would be run out of town in a nanosecond, insurable expense or not. Repeat after me, politics trumps economics (and corporate expediency).

Bottom line...don't EVER mess with the fertility gods.

John

February 13, 2008 9:33 PM  
Anonymous Anonymous said...

To the above mention about maternaty coverage, infant and maternal mortality are some of the biggest health indicators of any country, if you want a successful, growing, affluent society/community/country then you put money, time, and effort into your pregnant women. The coverage thats going into preventative/wellness care which is ensuring that there will be no complications and a healthy baby is born. If these precautions were not taking we would ALL have to eat the cost of paying for botched pregnancies which could result in costly procedures to try and safe mother and child.

Back to everyones comments on health insurance, preventative care (i.e. paying for that little stuff, like screenings, wellness visits, vaccinations etc.) would avoid us having to pay for a lot of those catastrophic events which would be avoided.

If our health insurance was more geared to preventative care cost could drop way down, however this is going to take a political and societal shift in the way we few health care.

And for whoever said that most insurance companies cover hearing aids, guess what you are probably one of the lucky few who has great coverage and can pull out that insurance cared any time you need care. Unfortunatly over 40million americans don't have that luxury and I guarantee you some of them have hearing problems!

- A public health professional who knows an ounce of prevention is worth a pound of cure!

April 01, 2008 5:15 PM  
Anonymous BF in Chicago said...

Being a long time wearer of hearing aids, (I NEED two) I cannot function in my Job or daily life without them.

I consider these to be a neural prosthesis.

Insurance companies routinely pay for artificial limbs and eyeglasses.
I can only conclude that Hearing aid manufacturers are really overpricing these small electronic devices because no pricing restrictions have ever been in place.
Obviously a two pronged approach is needed to make them Affordable and coverable.

July 24, 2008 2:25 PM  
Anonymous Anonymous said...

I have a granddaughter that requires a hearing aid. The cost for one ear is $3,000. I just can't understand why the insurance companies will not pay for this device. I know that you believe it is very unusual for a child to be deaf but if that's the case, then they should make the exception. This is a 6 year old child that has a disability. This is not a senior citizen that has had the enjoyment of being able to hear for most of their life during the aging process the hearing is deminished. This is chid trying to learn and hear the teacher. Unfortunately without the hearing aid, she is totally deaf in one ear. The insurance will pay $15,000 for BAHA implant but unfortunately at the age of 6, this is a very risky surgery.

February 12, 2009 7:21 AM  
Anonymous Meghan said...

I am 25 and have been single sided deaf since I was 4 months old. There is a simple outpatient procedure specifically for my type of loss called the BAHA that is freely available in countries with social healthcare and since 2004 has been covered by medicare here in the US, but I can't get it for myself!!!! I've tried now for years and keep getting hung up! It costs $15,000 all said and done (surgery, the sound device, post op visits, etc. I had my doc work up that cash cost so I could try to figure out how to pay for it out of pocket. I want to HEAR!!!!

March 04, 2009 9:46 PM  
Anonymous Michael Montenegro said...

I am 28 and have lived with a mild hearing loss since I was a year and a half old. I know that there are private plans that will help families who have children with hearing losses. What about those children like myself who grow up and still have hearing loss. I would love to pay for my own aids, the fact remains, like other adults, with a mortgage payment, car payment monthly bills and everything else that needs to be paid for, I found it harder now to maintain my hearing than it was when I was a child. This is where I feel there is something wrong with the system. A set of hearing aids that allow me to do my job costs anywhere from 5-8 thousand a pair. Who has that kind of money laying around? My plan will give me what they call a discount towards the purchase, which amounts to $500.00 towards one aid, a total of $1000.00. In my opinion, that's nowhere near enough. I try to take good care of myself and rarely ever visit the doctor aside from regular visits. With the money I put out monthly, I'd like to receive a little more help in this area. I work in the entertainment industry, audio visual, it's getting increasingly difficult to do the audio part, how do I get monetary assistance for this??

April 13, 2009 11:20 AM  
Anonymous Susannah said...

My mom was pregnant with me when she caught the german measles, thus here I am w/ bilat. profound neural hearing loss. I'm in no way blaming my wonderful mother for causing my deafness. As a child growing up, I remember going to a hearing aid office to constantly get new hearing aids/molds to accommodate my growth. In no way did I ever hear my parents complain about the costs of hearing aids/tune-ups. Now I am an adult and I am taking care of my hearing aid-related costs. Just last year I had to spend $4,000 on new aids! All these years I've been buying hearing aid batteries and constantly getting new tubes made because old ones would crack. What nuisance!!! I am now a registered nurse in S.F. and am familiar with the health insurance crap. It bothers me knowing that eyeglasses, walkers, prothesis, even cochlear implants are covered but not $4,000 hearing aids! I do know that my insurance pays for hearing TESTING but not hearing AIDS. I think we hearing impaired citizens who pay for health insurance should stand up and fight insurance companies through Congress or our State representatives. Will someone figure out how to get this legal pathway started then I'll sign a petition! We've sat on the back burner for so long and listening to people complain but no-one is DOING anything about it.

May 02, 2009 7:28 PM  
Anonymous Anonymous said...

As of now I heard in Illinois that the Senate bill#68 trying to be push that may be approved. On that bill state the insurance companies to cover hearing devices for hard hearing people. Senators Martin Sandoval and Dan Cronin these are members of senate responsible for the bill. People in Illinois are hoping that the bill will be approved. Well check it out here, I'm wonder in this online network that there are people giving their opinion about hearing aid.

May 03, 2009 8:19 PM  
Anonymous Anonymous said...

I think that insurance companies should at least cover hearing aids for those of us who have lost our hearing due to a medical problem. The bones in my ears are fused together so they do not vibrate when sound travels as they should. It is a medical condition that I could have surgery for (insurance will pay for this) but I have opted to get hearing aids because the surgery can make you go completely deaf or it may not make any difference at all. When I went to talk to someone about hearing aids I nearly fell off the chair when she told me how much. Luckily I found a great program that helps people who don't make much money and need to keep their jobs and attend school get hearing aids. If not for that I would be struggling. I struggle everyday at work trying to hear people. Why if I needed a hip replacement because a bone was screwed up I can get that but the bones being screwed up in my ears isn't enough to warrant hearing aids. Ridiculous!!!
(So then you have people who are hearing impaired, feel left out, and depressed because they can not hear...insurance will pay for their therapist and depression meds) It makes no sense!

July 10, 2009 4:27 PM  
Anonymous Jhon smith said...

Though Medicare will not cover the expense of hearing aids...it will cover most/if not all the expense of a surgery costing over $100,000.00 - A cochlear implant!

I guess this goes back to the time when our Government would prefer to spend thousands of dollars for one toilet seat.

Just think of the number of hearing aids Medicare could purchase!

Our same government through the use of VA Benefits covers hearing aids. I do not understand why Medicare cannot provide the same benefits, especially when most Medicare beneficiaries pay a monthly premium!

September 28, 2010 5:22 AM  
Anonymous Bhimashankar said...

I would be happy to pay for primary care out of pocket as long as I still get the benefits of group discounts negotiated by insurance companies. But, is this a good deal for the insurance companies? We know that 70% of medical expenses are driven by 10%-15% of the population with chronic illnesses. We also know that preventive maintenance of chronic conditions can save money in the long run by eliminating costly ER vists and invasive procedures. Because costs are driven largely by hospital procedures and because Primary Care has the ability to greatly reduce the number of hospital procedures required, covering Primary care is akin to my homeowner's insurance giving a discount for activating a monitored alarm system.

September 28, 2010 5:22 AM  
Blogger californiahealthinsuranceblog said...

Now I understand. Before I was having a hard time figuring it out. Thanks for the help

May 24, 2011 4:47 AM  
Anonymous Anonymous said...

As the mom of a 2 year old with a recently diagnosed hearing loss (that requires 2 aids), I have been doing a lot of research on this topic and I am so frustrated with my findings. I live in Missouri and there is state legislation that requires insurances to cover a child's first hearing aids and the audiology servces (and for a child, this gets espensive as they frequenty need new earmolds and hearing tests to assure their aids are functioning properly). I however (am an RN at the county hospital) have coverage from my job and its is a "self-insured" plan. In most instances, this means nothing. For my family this means, because self-insured plans are exempt from state mandates (they are goverened by a federal entity, which of course does not require insurance payment for a childs hearing aids), we are having to figure out how to come up with the money to help our child hear. Now, I got great prenatal care. I delivered my baby in a hospital. He had a newborn hearing screen (which he passed). My children (and my husband and I) get yearly exams and don't use the ER dr as our primary care physician. My husband and I work hard to provide our cildren with the things expected of us as parents: a house, clothes, food, education, extracurricular activities - all this with never any mention of charity. However, I know for a fact, that if I had no job, live in govt funded housing, collected food stamps and had smoked weed (or crack for that matter) my entire pregnancy (which probably caused the hearing loss) and never got no one prenatal care visit, medicaid would have paid for my child to have every service available to mankind. (A sidenote, my insurace does not cover speech therapy either. But ONLY for people who never had speech. Had my son HAD speech and had a stroke - covered. My child with hearing loss who can't hear speech and sbsequently needs to learn to talk - not covered. Ugh.) Anyway, my son gets speech therapy twice a week and this costs in excess of $1000/month. We are luckily getting it from a provider who has agreed to write this cost of!! But without it, my son's speech and language development would be suffering immensely. It frustrates me that if I were rich (which RNs are usually NOT), I could pay. If I were poor, somebody else would pay. But because I'm in the working middle class, my childs rare hearing loss is all the financial responsibility of my husband and I (even though we pay $350 a month for health insurance). I will be writing some strongly worded letters about this topic to the First Lady and to my insurance company and encourage all of you who are concerned to do the same. To the writer of the blog, I was JUST pondering this topic and had EXACTLY the same thoughts as to why it is not covered...because hearing loss is so prominent in the elderly. But there needs to be some sort of coverage for children like my son who suffer from a fluke of nature and are in their formitive years of speech and language development and are refused the right to one of their 5 senses that they had no part in the loss of. Stepping off my soapbox now but thanks for the forum to discuss a topic I've been fervently trying to spread the word about!

June 08, 2011 7:40 AM  
Anonymous Anonymous said...

I am 46 years old have had hearing aides for 3 years now with out for about 10 years my husband had to refinance his truck to get them for me we were not communicating well because of my loss and i do in home repair was affecting my job and relationship with family and friends recently one of my aides was pretty much destroid i live with one now and went back to reading lips replacement is 3500.00 i cant afford so i am at a loss on what to do i have checked every thing i can think of trying to figure out what to do :(
totally frustrated with the whole matter and go back in to my shell to avoid having to figure out how to get new hearing aides .....

September 27, 2011 6:43 PM  
Anonymous Anonymous said...

I was watching TV the other night, close captioned as I often take my hearing aids out after a tiring day. A commercial for Pos-T-Vac popped up--a vacuum tube to provide "male enhancement." I was struggling to get this picture out of my mind's eye, when I saw that this thing is covered by Medicare.

My hearing aids, which I wear as the result of a childhood bout of measles, and which enable me to live a normal life, are not.

It would seem to me that something that is the result of a disease and allows a productive adult to be fully functional would take precedence over something that would appear to be primarily recreational!

January 03, 2012 9:07 AM  
Blogger Katie Maxey said...

I am 23 years old and I was born with birth defects that caused me to have no hearing or ear canal in my right ear gradual hearing loss now due to Harding of the bones near my left ear drum. The Dr stated that eventually I'd loose complete hearing. It has caused me to have 12 jaw surgeries, 4 ear, and 3 sinus surgeries with the help of 27 screws, and 6 plates, and wire holding a hand made ear made out of cartlidge from my rib cage. I recently was told no insurance coveres aids and with my issues mine would be special made causing me to pay up to 3000 for one ear.. I called my insurance they stated that As of the new laws only 18 years and younger qualified for hearing aids and non of the plans at bcbs will pick me up. Now that sounds like discrimination if this is a new law and bc it's a birth defect! So upset!

January 05, 2012 10:08 AM  
Anonymous Anonymous said...

I am an 18 year old hearing impaired girl. I am mow a freshman in college. I have had hearing aids since I was 2 years old so of course it has been a huge impact on my life. The fact that there is no form of insurance on hearing aid is ridiculous or even any aid for them. I am very lucky to have parents who make a well salary, otherwise I would not have ended up where I am today. I just recently got phonak naidia hearing aids which cost about thousands of dollars just for one. My parents have to pay the entire price for them because no one will give us financial aid or insurance. In the end, its not fair that my parents pay all this money and they don't get any help.

January 12, 2012 7:58 PM  
Anonymous Anonymous said...

I consider hearing loss a catastrophic event. I wouldn't mind hearing loss being added to my insurance coverage in the event I lose my hearing in the future. I am following your logic; paying a premium for something that may never happen to me, but I sure sleep better knowing that I would be covered if it does. Your Home Improvement Insurance is a non-starter and does not apply.

January 24, 2012 9:07 AM  

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