Bills Digest no. 22 2012–13
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WARNING: This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.
Social Policy Section
20 September 2012
Date introduced: 12 September 2012
House: House of Representatives
Portfolio: Health and Ageing
Commencement: 1 January 2014
Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill's home page, or through http://www.aph.gov.au/Parliamentary_Business/Bills_Legislation. When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the ComLaw website at http://www.comlaw.gov.au/.
The Bill proposes amendments to the Dental Benefits Act 2008 (DBA) to apply from 1 January 2014. These amendments would extend eligibility for Commonwealth dental benefits, currently provided under the Teen Dental Plan to eligible teenagers aged 12 to 17 of families receiving Family Tax Benefit A (FTB(A)), so as to include children aged 2 to 17 of these families. The Bill also provides for the making of Dental Benefits Rules (Rules) that may specify the monetary limits on dental benefits for specified dental services to eligible patients during specified periods.
In Australia, the financial burden of funding private dental services falls mainly on individuals, not governments or private insurers. Of the $7.6 billion spent on dental care in 2009–10, some $4.6 billion was spent by individuals, compared to $1 billion spent by health insurers and $1.8 billion spent by governments.
Traditionally, responsibility for funding and delivering public dental services, such as school dental clinics and public dental hospitals, has fallen on the states and territories. While the Whitlam Government instigated the Australian School Dental Program in 1973, responsibility for funding and delivery soon devolved to the states, where it has essentially remained.
However, the issue of Commonwealth funding for dental services has been an ongoing focus in public debates on the funding of dental health services in Australia. That funding of private dental services was not included in Medicare, except in certain circumstances, has prompted concern in some quarters. In more recent times, ongoing reports of poor dental health (particularly among disadvantaged groups), long waiting times for state-run public dental services and financial barriers to private dentistry have added fuel to the debate. Successive federal governments have responded to these developments with a range of policy approaches. Broadly, governments have tended to favour either supporting and expanding state-run public dental services, or supporting the individual to meet the cost of private dental care.
Policies which favour the former, have included the Keating Government’s Commonwealth Dental Health Program (CDHP) which provided additional funding to state-run public dental clinics to provide dental services to concessional adults (later dismantled by the Howard Government); and the Gillard Government’s recent budget announcement of $345.9 million in additional funding to tackle long public dental waiting lists. Examples of the latter approach include the Howard Government’s support for private health insurance to assist people meet the cost of dental care, as well as its Medicare funded Chronic Disease Dental Scheme (CDDS); and the Rudd Government’s Teen Dental Plan (also under Medicare). Two of these, the CDDS and the Teen Dental Plan are briefly discussed below, as both are due to close in order to facilitate the introduction of a new Dental Reform Package announced on 29 August 2012.
In the 2011–12 Budget the Gillard Government committed to making dental reform a major focus of its next budget, as part of its agreement with the Greens. This commitment saw the Government establish a National Advisory Council on Dental Health (NACDH) to provide it with reform options, and direct some initial funding to dental workforce initiatives including establishing a dental intern year. The 2012–13 Budget saw an additional $515 million directed to dental services, largely to fund additional services in state-run dental clinics, but also to extend the dental intern year to include dental hygienists, and workforce and infrastructure support for dentists. These were described by the Health Minister at the time as ‘foundational activities’, with further announcements to be made.
In February 2012, the Gillard Government released the report of the NACDH, which proposed a number of staged policy options to help realise the longer term goal of universal and equitable access to dental care. As a first step toward this goal, the NACDH proposed that children and low‑income adults be given a universal capped entitlement to dental services, to be delivered via both public and private dental services.
At the time, the Government indicated it favoured a targeted approach to funding dental services, directed to those who were most disadvantaged.
On the 29 August 2012, the Minister for Health and Ageing, Tanya Plibersek announced the direction for the Government’s new Dental Reform Package. Key components of the six year package include:
- providing 3.4 million children aged two to 17 eligible for FTB-A with access to subsidised dental care, capped at $1000 per child over two years at a cost of $2.7 billion
- funding of $1.3 billion for the public dental system so that around 1.4 million additional dental services can be provided for adults on low incomes, including pensioners and concession card holders, and those with special needs and
- funding of $225 million for dental capital and workforce to support expanded services for people living in outer metropolitan, regional, rural and remote areas.
Implementing the Dental Reform Package requires the replacement of the Medicare Teen Dental Plan with the provisions in this Bill and the closure of the Chronic Disease Dental Scheme (CDDS). The latter would cease to operate from 30 November 2012, but is not repealed by this Bill.
On 6 September 2012, the Health Insurance (Dental Services) Amendment Determination 2012 (No. 1), was registered. This Determination will bring about the staged cessation of the CDDS by 30 November 2012, if not disallowed by Parliament.
Before turning to a discussion of the CDDS and the Teen Dental Plan, a brief overview of children’s dental services and oral health is provided.
In 1973, the states, territories and the Commonwealth agreed to establish an Australian School Dental scheme, majority funded by the Commonwealth, but delivered by the states and territories.
The program aimed to provide comprehensive dental treatment for all Australian school children up to the age of 15 years. Services were provided by trained dental therapists working under the direction and control of dentists. The Commonwealth provided 75 per cent of the capital and operating costs of training facilities for dental therapists, and 75 per cent of the capital costs and 50 per cent of the operating costs of the school dental clinics.
Funding of the scheme, initially through specific purpose grants to the states was gradually merged into general purpose grants in the early 1980s, effectively ending direct Commonwealth funding for the scheme from this time.
Western Australia (WA), South Australia (SA), Queensland and the Northern Territory still operate dedicated school dental programs, with varying age eligibility requirements. SA imposes a co‑payment for children whose parents do not hold a concession card. School children in the other states and territories may have access to public dental services, which also have varying eligibility and co-payment requirements and which may also treat eligible adults.
In terms of children’s oral health, the latest child dental health survey indicates that children attending school dental services continue to experience moderate levels of decay across all age groups, although levels vary with age. Of children attending school dental services, 46 per cent of six year olds experienced decay, while 39 per cent of 12 year olds and 60 per cent of 15 year olds had some history of decay in their permanent teeth.
Trends over time for decayed, missing and filled teeth (dmft) among children with deciduous teeth (that is, younger children), show declines to the mid-1990s but levels rising again in recent years. Declines in dmft among children with permanent teeth (that is, older children) have also occurred, but have stabilised in recent years. In terms of the states and territories, the picture is hampered by missing data for some years from key states (notably NSW and Victoria); however, the ‘general trend of both deciduous and permanent caries experience in children from nearly all states and territories points to a decline up to 1996 and 1997, followed by a small increase thereafter’.
The Minister has argued that the implementation of the provisions in this Bill would address declines in children’s oral health and help build a ‘unified national system’.
Although not addressed in this Bill, the CDDS is set for closure from 30 November 2012, in order to facilitate the new arrangements.
Introduced in 2004, and expanded in 2007, the CDDS provides capped Medicare dental benefits (up to $4250 over two years) to patients on referral from a GP who have a chronic illness (for example, diabetes, cardiovascular disease or HIV) which is being exacerbated by their dental problems. The current scheme built on an earlier scheme which had fewer services and a lower cap, which was subsequently expanded just prior to the 2007 election.
The CDDS quickly exceeded expenditure forecasts following its expansion in late 2007. Expenditure overall has now exceeded $2.6 billion, with more than 19 million services provided.
Both the Rudd and Gillard Governments have sought to close the CDDS, regarding the scheme as flawed, but the legislative instrument to facilitate this has been previously blocked in the Senate.
While the CDDS has provided millions of dental services to people with chronic conditions, it became embroiled in controversy over allegations of over servicing and rorting. A recent Medicare Australia audit revealed some problems with administrative compliance and record keeping, which prompted Medicare Australia to seek reimbursement of benefits paid to some dentists.
This resulted in a backlash from dentists who were concerned they were being unfairly dealt with. A private members’ Bill was introduced which would have required the Minister to drop the recovery action against dentists who were deemed to have made administrative errors. This prompted a Senate inquiry allowing an airing of the dentists’ grievances. Subsequently, the Minister responsible for Medicare Australia, Senator Kim Carr wrote to the Senate Committee undertaking to review some of the cases in question.
The implementation of the provisions in this Bill would replace the arrangements under the Teen Dental Plan.
The means-tested Teen Dental Plan was introduced in 2008, with the passage of the Dental Benefits Act 2008 (DBA). Eligible teenagers (mainly those in receipt of FTB(A), but also certain other beneficiaries are entitled to a dental voucher (currently to the value of $163.05, indexed annually) for an annual preventative dental check-up. The check-up can be provided in either private practice or a public clinic, by an eligible dentist or dental hygienist. Services are limited to preventative treatments only, such as an oral examination, x-rays, and scaling and cleaning.
A review of the DBA, required to be undertaken regularly, has found some shortcomings with the Teen Dental Plan. The fact that the voucher does not pay for any follow-up work, if this is identified as being needed, was criticised by some recipients. Recipients also expressed concern that sometimes the full amount is charged even where the level of preventative work appears minimal, or other recipients appear to be charged at different rates.
Although some 1.3 million teenagers are eligible for the voucher each year, uptake has been much lower than this. Just 30 per cent of eligible teenagers used the voucher in 2010–11 (the most recent year measured), a decline on the previous year when uptake was 32 per cent, according to independent review. The review described this outcome as ‘disappointing’. 
Other shortcomings identified include the process around sending the voucher to eligible teenagers. While Medicare Australia conducts regular mail-outs of vouchers each year to those teenagers it identifies as being eligible, teenagers who become eligible in November or December do not receive a voucher automatically. These teens or the families must request a voucher; or if they fail to do so, they may miss out.
The review was also concerned that certain at risk groups, particularly Aboriginal and Torres Strait Islanders, culturally and linguistically diverse teenagers, disabled teenagers and those who are homeless, might not be accessing the voucher and that more promotional work among these groups was needed. The review also observed that teenagers in rural and remote areas had lower rates of voucher utilisation compared to those in metropolitan and inner regional areas. The review also considered issues around bulk billing, noting that bulk billing rates by dentists are 63.9 per cent.  However, many families still face out of pocket costs if the dentist chooses not to bulk bill.
The basis of the policy commitment is the announcement made by the Minister for Health and Ageing, Tanya Plibersek on the 29 August 2012 that the Government would implement a Dental Reform Package.
The provisions in this Bill address only the first component of the Dental Reform Package, but do not close the CDDS or implement the other components of the package. Funding for the additional dental services to be provided in the public dental system announced in the package is dependent on the Commonwealth and the states and territories reaching an agreement.
At this time, the Bill has not been referred to a committee for consideration. The Senate Selection of Bills Committee has deferred a decision on referring the Bill to its next meeting.
The Greens have indicated they strongly support the Dental Reform Package, which includes the measures for children proposed in this Bill. Their spokesperson, Senator Richard Di Natale, who jointly announced the package with the Health Minister, described it as laying the foundations for Denticare (that is, a universal dental scheme):
This reform not only means millions of Australians will now be able to afford dental care, but it also lays the foundation for universal dental care in the years to come, building a healthier nation for all of us.
Nevertheless, the package inevitably involves the closure of the CDDS, an action the Greens have previously opposed. However, the Greens appear to have changed their view and now accept the closure of the CDDS.
The position of the Opposition is not clear, although it has questioned how the Government will pay for this commitment, along with its other proposed programs such as implementing the Gonski education reforms. The Opposition have also consistently opposed the closure of the CDDS.
MP for New England, Tony Windsor has welcomed the scheme. Other key Independents have not yet declared their views. Some have also previously opposed the closure of the CDDS.
The Australian Healthcare and Hospitals Association (AHHA), which has long advocated for dental reform and represents the public health sector, has welcomed the introduction of the Bill. President Pru Power described it as ‘an important step in progress to a comprehensive dental and oral health program which will deliver long overdue improvements in access to dental care for children and vulnerable adults’. She notes that the investment in dental health should ‘save money through preventing avoidable hospital admissions and increasing productivity’. As well, she predicted it would reduce tooth decay and inequity ‘by closing the gap between access to dental care between the rich and poor’.
Dentists have also welcomed the dental package, with the Australian Dental Association (ADA) describing it as ‘a significant initiative leading to a long-term improvement in Australia's oral health’. President Shane Fryer noted that ‘if dental care can be provided to children then their long-term dental health will be significantly improved. Early intervention and preventive treatments are a proven and well-established method to prevent poor dental health in later life’. While it considered that the CDDS had ‘delivered some valuable care’, it had been too widely available including to Australians ‘who were already able to access treatment’.
The Australian Medical Association (AMA) also welcomed the overall package of dental reforms, particularly those directed to children and low income families. President Steve Hambleton described it as ‘a huge improvement on the existing dental scheme’ that would give ‘many families the confidence that cost should not be an impediment to good dental care’.
However, some groups are concerned by the imminent closure of the CDDS. While the ADA does not oppose the redirection of funding away from the CDDS to the dental reform package overall, it expressed its concern that ‘the mode of closure of the CDDS has given little consideration to the many patients currently receiving treatment’. President Shane Fryer observed:
Many of the patients being treated under the CDDS require complex care; some of which includes surgical procedures that need to be completed over a series of months, for example periodontal treatment. It is unreasonable to expect patients to now be responsible for the cost of procedures they consented to on the understanding their treatment would be covered by Medicare.
Others have questioned whether the funding for the new dental package will be sufficient to reduce public dental waiting lists. Professor Hans Zoellner, Chairman of the Association for the Promotion of Oral Health, is quoted as saying that ‘the public system is already running at capacity and can’t attract the workforce needed to increase throughput’.
The Australian Council of Social Services (ACOSS) has welcomed the package, but also warned that the lag time between the closure of the CDDS and the start of the expanded dental benefits scheme in 2014, may increase pressure on public dental services.
The Explanatory Memorandum outlines the cost of the expanded scheme will be $2.7 billion over six years, from 2012–13. However, annual forecast expenditure is not detailed.
The Health Minister has not detailed from where the funding for the expanded program will be drawn, although she indicated that this would be detailed in the Mid Year Economic and Fiscal Outlook and that it won’t rely on the closure of the CDDS, which has been factored into budget calculations already.
While the dental reform package, and the provisions in this Bill have been widely welcomed, a number of issues warrant further consideration.
Although the Health Minister claims in her second reading speech that this Bill establishes the Child Dental Benefits Schedule (CDBS) for children aged two to 17, the Bill does not in fact do this. Instead it simply allows for the establishment of the Dental Benefits Rules, which may do this. The Bill does not specify what the Rules must contain or when these will be promulgated.
The Minister’s speech suggests that the CDBS would include ‘basic dental services’ such as dental checkup, fillings and extractions. But orthodontics would be excluded.  The details of services to be covered and who will provide these will rely on the Department consulting with the dental profession. Whether consultations will focus only on dentists or include dental prosthetists and dental hygienists remains unclear, although this workforce is identified as one that could deliver CDBS services.
The Bill specifies that those in receipt of FTB(A) with children aged two to 17 will be eligible for dental benefits, but it does not specify the other classes of persons who the Minister has indicated will be eligible as well. Under current arrangements for the Teen Dental Plan, eligibility for these other beneficiaries is specified in the Dental Benefits Rules, so it is assumed the new Rules would do this as well.
The review of the DBA found a number of shortcomings with the Teen Dental Plan, so these should be identified and addressed to ensure that similar problems do not occur under the expanded scheme. Particular attention may need to be given to better promoting the dental benefits to disadvantaged groups who were not consistently accessing vouchers under the Teen Dental Plan.
The barriers to services for those in rural and regional areas (including workforce issues) might also need to be addressed, to ensure that eligible children in these areas do not miss out on benefits. Improving the level of bulk billing among private dentists will also be challenging, particularly if an increase in demand drives fee increases.
The year gap between the commencement of the provisions on 1 January 2014 and the closure of the CDDS on 30 November 2012, could result in some children with chronic conditions who can currently access services under the CDDS, seeking treatment in public dental services or facing interruptions to their treatment. If they seek public dental services in jurisdictions where there is no dedicated school dental service, this could add pressure on these services and possibly exacerbate waiting times, as the additional investment in public dental services will take time to have an effect on workforce capacity.
The closure of the CDDS could also result in adults with chronic conditions seeking treatment in public dental clinics, adding further pressure on these services, although it is not yet clear if those who do not hold a concession card will be eligible for public dental services. This remains dependent on the Commonwealth reaching agreements with the states and territories over the scope of services and eligibility requirements.
A further unknown is how any increased private sector activity generated by the expansion in child dental benefits might undermine efforts to recruit dentists and other dental workers to the public sector.
Item 1 inserts a sign post definition of ‘FTB(A) person’ in section 4 referring the reader to subsection 24(2). Item 15 proposes amendments to subsection 24(3) so that the previous definition of ‘FTB recipient’ is replaced with a new definition. This new definition defines a FTB recipient as a person who has a child eligible for family tax benefit, or an approved care organisation of which the child is a client within the meaning of the A New Tax System (Family Assistance) Act 1999.
Items 2 and 5 propose amendments to sections 22 and paragraphs 23(1)(a) and (b), to extend the age eligibility for dental benefits to children aged two and over. The upper age limit of 17 remains unchanged.
Items 6, 7, 8, 14 and 16 replace the term ‘FTB(A) teenager’ in various sections of the Act, with ‘FTB(A) person’. These amendments are consequential and are to provide consistency with the proposal to extend the age eligibility requirements to include younger children.
Item 17 replaces subsection 62(2) with a new subsection that allows for Dental Benefit Rules that may impose a monetary limit on the dental benefit payable in relation to a specified service or services provided to specified eligible dental patients, during a specified period.
The Bill establishes the framework for the proposed children’s dental scheme by proposing provisions that extend the eligibility for dental benefits to FTB(A) children aged two to 17, from 1 January 2014. It also provides for the creation of Dental Benefits Rules (yet to be promulgated), which may specify the Child Dental Benefits Schedule including the services, conditions, monetary limits and time periods that would apply to these.
The Bill addresses the first component of the Government’s recently announced Dental Reform Package, which also includes increased funding for state-run public dental services to deliver more services to low income adults and other disadvantaged groups, and additional investment in capital and workforce in rural and regional areas. The implementation of these components is dependent on the federal government and the states reaching an agreement. The dental reform package is also predicated on the closure of the controversial CDDS.
While the dental reform package and the expansion of means-tested dental benefits to children aged two to 17 has been welcomed, a number of challenges present themselves. In relation to the specific provisions in this Bill, these challenges include: ensuring that the shortcomings identified in the review of the Teen Dental Plan are adequately addressed so they do not re-surface in the expanded scheme; building the capacity of the dental workforce in both the public and private sectors to meet increased demand and ensuring it is better distributed, and ensuring any increased demand for services does not drive fee inflation or erode bulk billing. An additional challenge will be ensuring an equitable and coordinated transition to the new arrangements.
Regular monitoring and an annual review of the impacts of the provisions in this Bill might therefore be warranted.
Members, Senators and Parliamentary staff can obtain further information from the Parliamentary Library on (02) 6277 2514.
. Commonwealth funding was provided under the Cleft Lip and Cleft Palate Scheme to help meet the cost of treatment of these disorders.
. Via rebates on health insurance premiums.
. T Plibersek, (Minister for Health and Ageing), Blitz on dental waiting lists to benefit low income Australians, op. cit.
. The Determination amends the Health Insurance (Dental Services) Determination 2007 so that no new patients can be treated under the CDDS from 7 September, 2012, with access to the scheme to cease for all patients from 30 November 2012. Once tabled in Parliament, either Chamber can vote to disallow the Determination within 15 sitting days, viewed 20 September 2012, http://www.comlaw.gov.au/Details/F2012L01837
. Co-payments and other criteria may also vary. For details of these see Appendix E, National Advisory Council of Dental Health (NACDH), op. cit.
. GC Mejia, N Amarasena, DH Ha, KF Roberts-Thomson and AC Ellershaw, Child dental health survey Australia, 2007: 30‑year trends in child oral health, AIHW, 25 May 2012, p. viii, viewed 17 September 2012, http://www.aihw.gov.au/publication-detail/?id=10737421875
. A Biggs, M Biddington, Dental Benefits Bill 2008, Bills Digest, no. 135, 2007–08, Parliamentary Library, Canberra, 2008, viewed 17 September 2012, http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22legislation%2Fbillsdgs%2FW0QQ6%22 .
. For example, those receiving financial assistance under the Veterans’ Children Education Scheme (VCES), the Military Rehabilitation and Compensation Act Education and Training Scheme (MRCAETS), and the Disability Support Pension (DSP).
. These clinical services are billed to Medicare under a single preventative dental check item – item number 88000 in the Dental Benefits Schedule (DBS).
. Ibid., p. 12. Medicare Australia does not conduct a mail out of vouchers late in the calendar year.
. The review notes that the physical requirement for a voucher is not necessary to receive services. Eligibility can be confirmed by phone.
. Ibid., p. 9. Bulk billing refers to when the dentist accepts the dental benefit as the full payment for the service and does not charge any additional fee.
. Closure of the CDDS will be effected by a Ministerial Determination, provided Parliament does not vote to disallow it.
. A Biggs, Dental benefits for chronic conditions—an update, op. cit.
. A Biggs, Dental benefits for chronic conditions—an update, op. cit.
. For example, Senator Nick Xenophon voted against the closure of the CDDS in a disallowance motion.
. This is set to include those in receipt of Abstudy, Carer Payment, Disability Support Pension, Parenting Payment, Special Benefit, Youth Allowance, Double Orphan Pensions, Veterans Children Education Scheme and the Military Rehabilitation and Compensation Act Education and Training Scheme.
. These include teenagers receiving Abstudy, Carer Payment, Disability Support Pension, Parenting Payment, Special Benefit, or Youth Allowance; teenagers over 16 who receive Veterans’ Children Education Scheme (VCES) or the Military Rehabilitation and Compensation Act Education and Training Scheme (MRCAETS); families receiving Parenting Payment, or the Double Orphan Pension in respect of the teenager; or teenager’s partner is receiving Family Tax Benefit Part A or Parenting Payment.
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