Spectrotemporal modulations (STMs) offer a unified framework to probe suprathreshold auditory processing. Here, we introduce a novel methodological framework based on psychophysical reverse-correlation deployed in the modulation space to characterize how STMs are detected by the auditory system and how cochlear hearing loss impacts this processing. Our results show that young normal-hearing (NH) and older hearing-impaired (HI) individuals rely on a comparable non-linear processing architecture involving non-directional band-pass modulation filtering. We demonstrate that a temporal-modulation filter-bank model can capture the strategy of the NH group and that a broader tuning of cochlear filters is sufficient to explain the overall shift toward temporal modulations of the HI group. Yet, idiosyncratic behaviors exposed within each group highlight the contribution and the need to consider additional mechanisms. This integrated experimental-computational approach offers a principled way to assess supra-threshold auditory processing distortions of each individual.