Hearing aids are sold by two types of businesses – traditional retailers (dealers) and medical practices (physicians). Be aware that Insurance companies and large-group discounters are also getting into the market.

Dealers

Prior to a 1977 FDA ruling that classified hearing aids as medical devices, they were sold the same way as any other expensive consumer product – by approved dealers. And, as with expensive products like cars and home improvements, those dealers commonly used overly aggressive and unethical sales tactics (see Appendix C “Justice Department Lawsuit”). A key objective of the FDA’s ruling was to create an incentive for states to pass and enforce licensing laws that would combat these abusive business practices. Today, in most states, anyone fitting hearing aids is required to hold a dispensing license, and is overseen by a state board that is empowered to revoke the license under ethical and professional regulations.

Physicians

Prior to the FDA’s action, physicians rarely sold hearing aids. They performed hearing tests to determine the need and then referred the customer to a trusted dealer for actual sales and fittings. During the 1980s, this began to change. Since physicians already employed audiologists as part of their diagnostic team, they figured “Why not have them fit hearing aids here in the office and capture that revenue?” Today it is rare to find an MD specializing in ears (ENT) that doesn’t sell hearing aids. This decision on the part of ENTs and audiologists to enter the hearing aid business initiated a 40-year struggle with traditional dealers that continues to this day.

Insurance Companies

Another development is the entry of insurance companies into the business. Hearing aids are classified as durable medical equipment (DME) for insurance purposes. As such, it’s becoming more common for large entities like the federal government or union based businesses to offer hearing aid benefits to their employees. Large-group discounters pose as insurance benefits, but the reality is that they are middle-men who drive prices up by getting between you and the dealer.

Dealers, physicians and insurance companies continue to lobby congress and the FDA to create laws or regulations favorable to them. However, other than the initial FDA ruling, the government has largely let the market decide what is best.