Program: Mornings
Date: 23/9/2024
Time: 10:12 AM
Compere: Sarah Macdonald
| SARAH MACDONALD: |
If you were strapped for cash and you needed surgery, would you take the cash from your super to do it? Have you done this already? How much did you take out and what for? Love to hear from you if you have done this – the number is 1300-222-702. You can get access to your super for some issues in life, and I know people that have done it for help with their kids, but what about for yourself in terms of health? New data from the ATO is showing that more than 150,000 people have tapped their superannuation early to pay for medical treatments like weight loss surgery and IVF. Is it a good idea though? Dr Rachel David is the CEO of private health insurance industry peak body Private Healthcare Australia, and with you now. Welcome. |
| RACHEL DAVID: | Morning, Sarah. |
| SARAH MACDONALD: | How easy is it for people to access their super for medical treatments? |
| RACHEL DAVID: | Well, look, we’ve seen this very big increase really since the Morrison government drew attention to it by allowing people to take out $20,000 fairly early in the pandemic. It is something that people- you can basically fill in some forms and apply to the tax office to take out your super early on medical grounds. But what is concerning us about this is that traditionally, this was really used for the people at the end of life, when they really had two- 18 months to two years left. But now, we’re seeing it used a lot for cosmetic surgery and for some procedures like spine surgery and weight loss surgery that have a very high failure, and also attract high out-of-pocket costs. And the rate that it’s happening now, we’re seeing it actually contribute to the rapid inflation of medical out-of-pocket costs in these areas. |
| SARAH MACDONALD: | Right. You can understand people doing it for IVF, I suppose; weight loss surgery if they’re dangerously- have excess weight. But did you say cosmetic procedures? |
| RACHEL DAVID: | Yeah. That really dominates in this area. And we’re pretty concerned by this, because it’s allow- not only has it attracted some unscrupulous operators both on the financial services side and unfortunately on the medical side, it has a big impact on what people have left for retirement. So if you take out $20,000 for a procedure in your- when you’re 40, going to be $100,000 short when you retire. And at that time, you may be exposed to a whole lot of things where you really do need access to medical treatment because your health’s deteriorating. |
| SARAH MACDONALD: | And it’s not an optional treatment … |
| RACHEL DAVID: | [Talks over] Absolutely. |
| SARAH MACDONALD: | … such as a breast increase. Or when you say cosmetic, is- that’s what, stuff like boob jobs and …? |
| RACHEL DAVID: | A lot of breast reductions and breast surgery … |
| SARAH MACDONALD: | Right, reductions. Well, reductions can cause terrible- if people are in terrible pain, and they- so is it for- also for increases in breast size, and facelifts and things? |
| RACHEL DAVID: | Yeah, we’re seeing a lot of rhinoplasties, or nose jobs, and a range of cosmetic dental procedures as well. |
| SARAH MACDONALD: | Really? Okay. So what are the- you said the implications are yes, if they take out 20,000, then that can mean they have $100,000 less super. How much money are people taking out? Is there a limit on the amount they can take out? |
| RACHEL DAVID: |
Well, it’s limited by how much money they have in their accounts, unfortunately. So we saw 800,800- $800 million withdrawn from super last year, and the numbers keep going up. So not only is it- it’s having a few effects. It’s causing out-of-pocket costs to inflate in those treatment areas. It’s also causing a lot of price gouging in those areas. We’re hearing some astonishing amounts of money that people are paying for things like dental care and weight loss surgery, and it’s resulting in people being short for their retirement when they will definitely have health costs that they need for things like joint replacements and heart disease and so forth. So look, it is problematic at multiple levels, and we think that far more control needs to be placed on early release unless the person concerned has a terminal illness or needs it for end of life care. |
| SARAH MACDONALD: |
Monica’s texted me, saying: My mother needs a heart valve replacement. The only valve which would help her condition is not approved by the TGA in Australia. It’s used in Europe, USA and China, so my parents are going to raid their super to cover the cost – $40,000 of that. And it’s a big- too big a cost for the health system to approve the valve according to what their doctor has told them, so there’s $40,000. Jen says: I’m an RN needing foot surgery, 64 years old, tried for over a year but gave up because I found it too difficult to get the super. I guess the implications, though, are large. What do you think should be done to stop this from happening? I mean, I suppose there’s- for a start, can they crack down on the price gouging associated with it? And then, what about in terms of what sort of procedures you can take out for super? |
| RACHEL DAVID: | Well, look, in an ideal world, superannuation would be kept completely separate from the health system, and this would be shut down for everyone other than people with a terminal illness. But understanding that there is some community sentiment, that this is people’s money and they should be able to use it, I think there are some things that need to be done to tighten it up. And the first thing is, under no circumstances should health professionals be providing financial advice and providing access to how-to apps or links on their website to forms to withdraw super early, for example. |
| SARAH MACDONALD: | So what, doctors are doing that, are they? They’re saying here- |
| RACHEL DAVID: | [Talks over] Oh, yeah, we have detected numerous examples of medical practices that are linking to these apps to help people withdraw early. And in fact, we’ve even heard a number of reports of doctors and dentists directing people to sites and to apps which purport to help them access their super early. So that’s the first thing. I think that’s the conflict of interest and potentially pretty unethical.
Secondly, we think people need to be given independent, informed financial consent so that they understand the impact of compounding on how much they’re taking out, i.e., the $20,000 when you’re 40 turning into $100,000 when you are over 65. So that’s the second thing that I think is pretty important. People also need to, I think, get- before they can access their super, they need to get at least one other quote for the surgery from another practitioner so that- just like you would if you were facing a very expensive cost for your house or car. If you’re going to withdraw your super, it’s a serious decision and you need to get a couple of opinions on how much it’s going to cost. |
| SARAH MACDONALD: |
Yeah. Well, I know the Coalition is looking at people being able to access their super to buy houses and things, and the concern is that it’ll increase the prices of houses by that amount. How much is this having an impact on the cost of procedures? Is it inflating the prices of some medical procedures? |
| RACHEL DAVID: | Oh, yes, it absolutely is. And in an inflationary environment, we’ve seen between 70 and 90 per cent increases in out-of-pocket costs in those key procedures that people often use since this trend started. So I think- for the people that are looking at the policy of early release for housing, I think this is a really salutary lesson on what could potentially happen. |
| SARAH MACDONALD: | Well, it’s interesting, isn’t it? So these prices have gone up for everybody, and because of the more money that people have if they access their super. |
| RACHEL DAVID: | Absolutely. And in an inflationary environment, this is something we need to be extremely careful of, because there are other things pushing up costs in the health sector and this just adds to the upward pressure on costs, and it affects everybody. |
| SARAH MACDONALD: | Yeah. One person has texted, saying: There’s no point in having heaps of super if you’ll be dead before retirement from a heart attack because you’re massively obese. And so, that would be an argument perhaps for the gastric banding surgery. So you’re not saying ban all, but perhaps the cosmetic procedures, at least. |
| RACHEL DAVID: | Yeah. With the gastric surgery also and the weight loss surgery, I think there are a couple of things there. One is that people really need to talk to their doctor about, firstly, the failure rate. We see less than half of these procedures resulting in a satisfactory outcome and long-term weight loss for people. They often return to the system for further treatment. So the informed clinical consent needs to be appropriate before people go down this path. And secondly, increasingly, there are medical ways in which you can lose weight as well. So there is the alternative of the new weight loss drugs that are coming into the market. That has already resulted in fewer people presenting for weight loss surgery, which is a really serious medical procedure. |
| SARAH MACDONALD: | Thank you so much for your time today. |
| RACHEL DAVID: | Thank you, Sarah. |
| SARAH MACDONALD: | Dr Rachel David, who’s the CEO of private healthcare industry peak body, Private Healthcare Australia. |
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