An apparatus and method for modifying a speech waveform using sinusoidal speech model parameters, includes finding a net masked threshold for each sinusoid for a normal-hearing subject, and adding the effects of impairment and obtaining an impaired masked threshold. The method also includes finding gain needed for each sinusoid so that its distance above the impaired masked threshold is equal to the distance above normal masked threshold, and multiplying sinusoid amplitudes by the gain. The sinusoidal model is used to address the problem of spread of masking within internal speech components by determining the amount of masking that occurs between surrounding sinusoids. The masked threshold for each sinusoid is determined based on the additive effects of masking by other sinusoids in each frame. The method compensates for recruitment by a transformation to determine how much each sinusoidal amplitude must be amplified in order to maintain the loudness relationships between sinusoids and their masked threshold in the normal-hearing and hearing-impaired domains.