Dr Rachel David spoke with ABC’s Steve Austin on accessing super for dental treatment

Station: ABC Radio Brisbane
Program: Mornings
Date: 24/5/2024
Time: 8:43 AM
Compere: Steve Austin
Interviewee: Dr Rachel David, CEO, Private Healthcare Australia


STEVE AUSTIN: Should you be able to use superannuation to pay your dental bills? If you’ve been to the dentist lately and you’ve got major work done, it would have cost you thousands. Maybe you were even tempted to draw money from your super to pay for it. More than 13,000 Australians drew $313 million out of their superannuation reserves to pay for dental treatment last year. Private insurers want that to stop. Dr Rachel David is the Chief Executive Officer of Private Healthcare Australia, the private health insurers peak body. Rachel David, is drawing down on your super to pay for dental work common practice?
RACHEL DAVID: Well, look, it’s been getting more and more common for people to draw down on their super early to pay for dental and some medical bills. And look, we think this is turning into a real problem whereby some vulnerable people are getting exploited, and also the release of this money early is actually causing the costs of some of these hard-to-access procedures to inflate. We’re seeing a lot of price gouging out there, and we’re seeing a lot of reports of health professionals, both medical and dental, actually encouraging patients to do this and providing financial advice themselves, which is a massive conflict of interest.
STEVE AUSTIN: Is it dentists you’re telling me who are suggesting people do this?
RACHEL DAVID: We’ve picked up evidence that in a number of medical and dental practices, there’s paraphernalia available which tells people how to access their super early for particular procedures. We’ve also heard …
STEVE AUSTIN: [Interrupts] So this is paraphernalia in the dental clinic themselves?
RACHEL DAVID: Yes, and also on websites which the medical or dental professional has open that’s promoting their services.
STEVE AUSTIN: So that suggests that dentists know exactly what’s being suggested here.
RACHEL DAVID: Yeah. And look, one of the problems that was raised in the ABC report about this that we’ve also picked up on, is that very rarely on those websites or those apps, and very rarely in the medical or dental consultation, is the full implication of drawing down early on your super explained to people. And the fact that if you take out $10,000 in your 30s and 40s, you’re draining your retirement income by a six figure sum, and that can be really significant for people that may well end up on the aged pension.
STEVE AUSTIN: Under what circumstances, if any, should a person be allowed to draw down super for dental work?
RACHEL DAVID: Well, look, we really want early access to super to be restricted to people with a terminal illness or a life threatening condition. We are really aware that the costs of dental care are very high for some procedures and for some people, but that needs to be dealt with within the health portfolio and by strong consultation between all of the funders in the health portfolio, be that the health insurers, the Department of Health or the DVA. At the moment, what we’re seeing is that people are losing out twice. They’re being price gouged by a lot of the professional fees involved for these services and their retirement incomes are being drained. And the question we need to be asking is: why do these services cost so much, and what can we do to bring the price down? Not how can we actually drain more money from vulnerable people who don’t actually have that much to spend?
STEVE AUSTIN: Doctor Rachel David is the Chief Executive Officer of Private Healthcare Australia. They’re private health insurers’ peak body. Rachel David, your members must have fabulous databases, so you must be able to answer that question. Why is it happening? Are you suggesting- what I’m suggesting is, is that it looks like the people accessing super is making certain that the cost of dental care goes up knowingly and deliberately by the dentist.
RACHEL DAVID: Well, we’ve had some anecdotal reports that the actual costs that have been charged to the patients seem to pretty much exact match the amount of super they’ve got available. And there are people that- there are vulnerable people out there that disclose this kind of information, and then they get price gouged according to how much money they might actually have to spend. And that’s incredibly unfortunate, but …
STEVE AUSTIN: [Talks over] Is that legal by the dentist? Is that legal?

Well, it’s not. It could be breaching a number of laws, including the consumer law. And it strays into the area of providing financial advice, which is also a tricky legal area. But it’s very difficult to prove and difficult to police. What we need to do is to tighten up the system and then work much harder to make sure some of these difficult-to-access procedures are made more affordable.

I guess the other problem, Steve, is that some people are drawing down on their super for procedures that really are more life enhancing, not medical, and procedures that have a very low chance of being successful. So they’re actually losing out three times. Their health is not improving. They might have had drawn down for weight loss surgery or back pain surgery that has a low chance of success. They get price gouged on the out of pocket cost and they’ve lost their retirement savings, so that is not a system that’s actually helping people.

STEVE AUSTIN: Do you think there needs to be a law change in this area?

Yeah. I think we do need to tighten up in a number of ways. If we can’t actually stop the leakage from this source- for out of superannuation completely, what we need to do is put some rules in place so that health professionals who are doing this, they can’t give financial advice, they can’t direct people to the dodgy apps and websites that show them how to do this. And they must provide- or they must tell people to get another quote for the cost of their treatment and make their own fees and charges more transparent.

One other thing that we’re asking is that a rule that could be put in place is that funds are only released for super based on reasonable fees, which can be determined by the Medicare benefits payable or the private health insurance rebates.

STEVE AUSTIN: I appreciate your time. Thank you very much, Dr Rachel. David.
RACHEL DAVID: Thanks, Steve.
STEVE AUSTIN: Rachel David is the Chief Executive Officer of Private Healthcare Australia.
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