The Free-Market Concern With Warren’s Hearing Aid Proposal

Proponents of the Over-the-Counter Hearing Aid Act from the libertarian Niskanen Center accused critics in a recent op-ed of misleading about the bill, after previously suggesting we were tricked by fake news, in order to benefit hearing aid manufacturers. They also suggest that the opposition—which they refer to as “conservative,” but also includes libertarian organizations like my own—are overly fixated on the fact that Elizabeth Warren is the bill’s lead sponsor and would otherwise be supporting what they insist is deregulation.

I can’t speak for the other groups involved, but my organization is not against deregulating the hearing aid market. Rather, we are concerned that the OTC Hearing Aid Act violates federalist principles and could ultimately lead to even more regulation down the road.

Not all stated efforts at deregulation are created equal. Sometimes partial or poorly conceived deregulation can end up making a problem worse and result in even tighter regulations in response. Thus even organizations dedicated to limiting the role of government can find certain actions taken under the banner of deregulation to be troubling.

One source of major concern with the OTC Hearing Aid Act is that it requires state regulations to be preempted, and grants the FDA new authority for regulating the sale of hearing aids. The Niskanen Center co-authors argue that state-level licensing boards restrict competitive entry into the market, a problem that the federal government must step in to solve.

It’s likely true that many if not all states should enact reforms to spur a more competitive market and improve access to hearing aids. Protectionist licensing boards are a problem in many industries. But bad state policy needs to be corrected by state politicians. Sometimes that means more work for advocates of free markets, but it is worth it to preserve our federalist system.

If the federal government took over every time some states were messing up their markets with bad regulation, then there would be nothing left that wasn’t under federal control.

We must always remember that a federal government with the power to preempt state rules in order to free markets also has the power to preempt state rules in order to impose tighter controls. And when regulations are made at the one-size-fits-all federal level, there’s no seeking relief in a neighboring state with better rules.

Promises from federal regulators that they have no intention to overstep in how they interpret their new authority to set standards regarding the safety, marketing, and audio output levels of a new class of hearing aids should offer little comfort. Even if they are sincere, the same authority will exist for future administrations that may have a more interventionist or protective mindset.

On that point, it’s not unreasonable for free-market groups to be troubled by Senator Warren’s role in crafting the bill, or to question the sincerity of her new found interest in deregulation. After all, this is the same Senator Warren who spearheaded creation of the Consumer Financial Protection Bureau, a massive, unaccountable bureaucracy that believes there is no practical limit to its power to interfere in the market in the name of protecting people from their own free choices. Senator Warren has never met a market she hasn’t wanted to control—until now, we’re led to believe.

Finally, the Niskanen Center co-authors note potential influence from audiologists and manufacturers in stirring up opposition to the bill, but fail to acknowledge similar special interests operating on the other side of the debate. Bose expects to profit handsomely from the legislation and is spending on lobbying to help get it passed. They also happen to be headquartered in Senator Warren’s home state of Massachusetts. A coincidence, no doubt.

Ultimately, we agree that more competition in the hearing aid market is desirable, because it would reduce prices and improve access for consumers. We also see a need to reduce the government footprint in this and other healthcare markets. We’re just not convinced this bill will accomplish those goals.