To determine whether functional and psychosocial outcomes associated with hearing impairment are a direct result or stem from prevalent comorbidity, we analyzed the impact of two levels of reported hearing impairment on health and psychosocial functioning one year later with adjustments for baseline chronic conditions. Physical functioning, mental health, and social functioning decreased in a dose-response pattern for those with progressive levels of hearing impairment compared with those reporting no impairment. Our results demonstrate an independent impact of hearing impairment on functional outcomes, reveal increasing problems with higher levels of impairment, and support the importance of preventing and treating this highly prevalent condition.