Raiding Retirement Savings for Dental Work Driving Up Costs, Warns Australian Health Funds

AUSTRALIA: According to Private Healthcare Australia (PHA), the peak body for health funds in the country, allowing thousands of Australians to drain their superannuation for dental care is driving up the cost of dentistry for all consumers. The concerning trend has seen a 372% increase in the amount withdrawn from retirement savings for dental treatment over the past five years, reaching $313.4 million in 2023.

As quoted by PHA CEO Dr. Rachel David, “We are very concerned about growing reports of dentists encouraging their patients to access their superannuation for dental care. It is a clear conflict of interest when the dentist can profit from it.”

Impacting Retirement Savings

The practice of raiding superannuation for dental work is not only robbing people of their retirement savings but also driving up the cost of dental care for all Australians, according to PHA. Dr. David warned, “If a 40-year-old withdraws $20,000 from their superannuation today, they are likely to be at least $100,000 poorer when they reach retirement.”

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In response, PHA is calling for the Australian government to tighten rules for early access to superannuation, restricting it only to terminal and life-threatening medical conditions. The organization has proposed several measures, including:

• Requiring more than one quote for the cost of treatment before access is granted
• Insisting on a second independent medical opinion
• Preventing health professionals from providing financial advice to their own patients
• Allowing the release of funds based on reasonable fees
• Ensuring informed financial consent by explaining the lost value of funds at retirement age

As stated on the nationaltribune.com.au website, Dr. David emphasized, “The benefits of compulsory superannuation in providing a retirement income for millions of Australians are significant. The Government must consider what egregious billing is doing to all Australian consumers trying to access healthcare during a cost-of-living crisis.”

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Transparency and Consumer Empowerment

To help put downward pressure on dental costs, PHA is also advocating for an independent website for dentists’ fees, allowing consumers to shop around, as well as mandatory price displays for individual clinics, with fees for common services published on their websites and windows.

As health funds collectively paid a record $3.36 billion for members’ dental treatments in 2023, the issue of rising dental costs and the impact of early superannuation withdrawals has become a pressing concern for Australian consumers and policymakers alike.