S3739

This bill directs the Secretary of Veterans Affairs to establish a two-year demonstration project within one year of enactment. The project will evaluate the fiscal impact of covering FDA-cleared, over-the-counter hearing aids for eligible veterans. Eligibility requires enrollment in the VA patient system, an audiologist's determination of medical necessity for mild-to-moderate hearing loss, no red flag conditions, and access to a mobile device for functionality. The project will be carried out at not fewer than two VA medical facilities across different Veterans Integrated Services Networks. The money trail for this bill involves the Department of Veterans Affairs directly procuring or reimbursing for OTC hearing aids during the demonstration project. This opens a new, albeit initially limited, procurement channel for manufacturers and retailers of FDA-cleared OTC hearing aids. The bill does not specify an appropriation amount, but the VA's existing healthcare budget will fund the demonstration project. Companies that produce or retail these devices are positioned to gain from this new market segment. Historically, the FDA finalized its rule for OTC hearing aids in October 2022, allowing them to be sold directly to consumers without a prescription. Following this rule, companies like $GNRC (through its Jabra Enhance brand) and $SONO (through its Sonos Hearing brand, though not yet launched) entered or expanded in the OTC market. Retailers such as $WSM (Walgreens), $COST (Costco), $WMT (Walmart), $TGT (Target), $CVS (CVS Health), and (Walgreens Boots Alliance) began stocking these devices. While no direct VA legislation on OTC hearing aids has passed previously, the FDA's 2022 ruling led to increased product availability and consumer awareness, benefiting these retailers and manufacturers. Specific winners include manufacturers of FDA-cleared OTC hearing aids, such as GN Group ($GNRC) with its Jabra Enhance line, and potentially other companies that develop or acquire OTC hearing aid technology. Retailers like Walmart ($WMT), Target ($TGT), CVS Health ($CVS), and Walgreens Boots Alliance, which already sell OTC hearing aids, stand to gain from increased demand if the VA demonstration project proves successful and expands. The bill does not specify direct funding for companies but creates a new demand channel. Next, the bill will be considered by the Committee on Veterans' Affairs. If passed by the Senate, it moves to the House. If enacted, the Secretary of Veterans Affairs must commence the demonstration project within one year, running for two years. This timeline indicates a gradual market impact, with initial benefits to companies beginning within 1-3 years.