Although breathy vocal quality and hearing loss are both prevalent age-related changes, their combined impact on speech communication is poorly understood. This study investigated whether breathy vocal quality affected speech perception and listening effort by older listeners. Furthermore, the study examined how this effect was modulated by the adverse listening environment of background noise and the listener's level of hearing loss. Nineteen older adults participated in the study. Their hearing ranged from near-normal to mild-moderate sensorineural hearing loss. Participants heard speech material of low-context sentences, with stimuli resynthesized to simulate original, mild-moderately breathy, and severely breathy conditions. Speech intelligibility was measured using a speech recognition in noise paradigm, with pupillometry data collected simultaneously to measure listening effort. Simulated severely breathy vocal quality was found to reduce intelligibility and increase listening effort. Breathiness and background noise level independently modulated listening effort. The impact of hearing loss was not observed in this dataset, which can be due to the use of individualized signal to noise ratios and a small sample size. Results from this study demonstrate the challenges of listening to speech with a breathy vocal quality. Theoretically, the findings highlight the importance of periodicity cues in speech perception in noise by older listeners. Breathy voice could be challenging to separate from the noise when the noise also lacks periodicity. Clinically, it suggests the need to address both listener- and talker-related factors in speech communication by older adults.