RD544 - Health Insurance Mandate Review – Hearing Aids for Youth Under Age 19

Executive Summary:

Legislation would mandate health insurance coverage of hearing aids for youth under age 19

Senate Bill 423, passed during the 2020 General Assembly session, mandates that insurance plans in the individual and fully insured group markets cover hearing aids for children. The bill requires plans to cover up to $1,500 per hearing impaired ear for hearing aids and related services every two years. In addition, the bill requires that the hearing aid be recommended by an otolaryngologist, a physician specializing in the ears, nose, and throat (commonly referred to as an ‘ENT’).

Hearing aids are necessary for children with hearing loss but are expensive for families

There is consensus in the medical community that hearing aids are necessary for children with hearing loss. Hearing aids are the primary way to amplify sound and enable children with hearing loss to hear. Enabling children to hear at very young ages is essential to their speech and language development. Audiologists and otolaryngologists have a goal to fit hearing aids to newborns with hearing loss within six months after birth, because the earlier a child is able to hear effectively, the better their speech and language development.

Hearing aids and related services cost between $2,200 and $3,700 per ear over the course of two years, and very few health plans in the individual and fully-insured group markets cover these services. Many children have hearing loss in both ears, doubling the cost to the families. Audiologists report that many families struggle with the financial burden of paying for hearing aids.

Under the Virginia Health Benefit Exchange law, proposed mandate would not apply to individual and small group plans

Maximizing the number of Virginians who would receive coverage for children’s hearing aids would necessitate the passage of a new mandate (to include the large group market) and adopting a new benchmark plan (to include qualified individual and small group plans).

Under the Virginia Health Benefit Exchange law that was enacted in 2020, new state health insurance mandates cannot be applied to individual and small group health plans that are part of the exchange. Therefore, if SB423 were enacted it would not apply to these plans. The mandate would, however, apply to fully-insured large group plans, including the five state employee health plans.

Virginia could adopt a new essential health benefits benchmark plan that includes hearing aid coverage, which would result in plans in the individual and small group markets providing this benefit. (Under the ACA, individual and small group plans are required to offer coverage included in the state’s benchmark plan.) However, large employer group health plans would not be required to provide this coverage. The Centers for Medicare and Medicaid Services clarified this year that a state must defray the cost to insurance plans of any new mandates enacted on or after January 1, 2012 even if they are part of a new benchmark plan. The state would therefore incur costs under this approach. Further, a new benchmark plan must meet all federal requirements and is unlikely to be implemented until at least January 2023.

SB423 would have a fiscal impact for the state, because it would apply to the five state employee health plans. General funds are used to pay for a portion of the state employee plans’ premiums. Language in the Appropriation Act states that SB423 will not be enacted on July 1, 2021 if it is expected to have a fiscal impact.