Rip-off fears on super for weight loss

Allowing early access to superannuation to pay for weight-loss surgery and other healthcare ‘could see people ripped off’.

Continuing to allow early access to superannuation to pay for weight-loss surgery and other healthcare, without tightening the rules, could see people ripped off or put in danger, the Department of Health has warned.

After a long-running review, Treasury has proposed only minor changes to the rules around early access on compassion grounds, having deemed the use of superannuation “beneficial in a world of finite government resources”.

The review followed a massive increase in applications, partly driven by marketing from weight-loss clinics. The amount of superannuation released for healthcare surged to $278 million in 2017, raising questions over the appropriate use of retirement savings.

Documents obtained by The Australian under Freedom of Information laws show the Health ­Department did its own consultation as part of the review.

It heard of brokers charging hundreds of dollars to help people ­access their superannuation and providing limited information on arrangements with specialists.

“During Health’s consultation, nearly all medical stakeholders expressed concern about the ­involvement of third parties, ­particularly if there is financial gain,” the documents state.

“Health also holds concern about this model, particularly when there is a financial interest by the third party that may be encouraging inappropriate pathways for access to medical services.”

While Medicare-funded ser­vices have been deemed safe and ­effective, the department worried that superannuation could be used to pay for “a medical service that is not supported by evidence or considered to be an effective treatment by the Australian medical profession”.

In its draft changes, Treasury has proposed that a second doctor be required to sign off on the medical treatment: one must be the ­applicant’s regular doctor, and one must be a specialist in the field related to his or her condition.

They must also certify that the treatment is relevant.

Treasury has not proposed any crackdown on third parties, but has sought to restrict overseas medical treatment to cases of life-threatening illness or injury or where the individual lives abroad.

It has so far decided not to impose caps on the amount able to be released for medical treatment, or require the regulator to deem the fees reasonable or the individual to obtain multiple quotes.

The department heard no evidence from the health sector that doctors were increasing their fees in superannuation cases “however some suggested it was possible”.

Like Treasury, the Health ­Department found the increased demand for superannuation-funded services was likely due to private-sector affordability issues — weight-loss surgery will soon be mandated only for gold category insurance policies — and public hospital waiting lists.

Before getting on to an elective waiting list for bariatric surgery, “patients usually have to wait and then progress through a number of different pre-surgery bariatric programs”, the documents state.

“Anecdotal evidence suggests the actual waiting time for ­primary bariatric surgery can be up to seven years.”

Federal Health Minister Greg Hunt has given insurers 12 months to introduce new categories, and has yet to announce his response to a review of out-of-pocket costs. One option would allow GPs to give patients referrals to multiple specialists, whose fees they could then compare.

There will almost certainly be a crackdown on booking fees.