The aim of this paper is to promote a better understanding of hearing impairment as a communicative handicap, primarily in noisy enviornments, and to explain the essentially limited applicability of the hearing aid. From available data we can conclude that about 7.5% of the population is auditory handicapped, with a hearing loss for speech ⩾ 24 dB. Every hearing loss can be interpreted as the sum of a loss class A (Attenuation), characterized by a reduction of the levels of both speech signal and noise, and a loss class D (Distortion), comparable with a decrease in speech‐to‐noise ratio. On the average, the hearing loss of class D (= hearing loss in noise) appears to be about one‐third (in dB) of the total hearing loss (A + D = hearing loss in quiet). A hearing aid can compensate class‐A hearing losses, giving difficulties primarily in quiet, but not class‐D hearing losses, giving difficulties primarily in noise. The latter class represents the first stage of auditory handicap, beginning at an average hearing loss of about 24 dB. An algorithm for computing speech level relative to speech‐reception threshold as a function of hearing losses of classes A and D, as well as acoustic gain, internal noise, and quality of the hearing aid, has been developed and examples will be given.