Australian Medicare Levy Rise Could Fund Denticare

by Mary Swire, Tax-News.com, Hong Kong

30 July 2009

Among the recommendations of the final report of Australia’s National Health and Hospitals Reform Commission, a proposal has been made to establish a plan to provide universal access to basic dental care, to be funded by a rise in the Medicare levy.

The Commission’s wide-ranging recommendations on strengthening and improving Australia’s health system would cost between AUD2.8bn (USD2.3bn) and AUD5.7bn (USD4.7bn) per annum. However, the estimated cost of the dental plan, or “Denticare”, as it would be called, is put forward as an additional item.

The Commission points to the 650,000 people who are currently on public dental waiting lists and to the worsening dental health of Australia’s children. Under Denticare, it proposes, everyone would have access to basic dental services such as prevention, restoration, and the provision of dentures. However, people would still have the option to take out health insurance for additional dental services (such as orthodontics).

Should the plan be implemented, Denticare would transfer to the government responsibility for the cost of dental services which is currently paid through private health insurance or directly by consumers. That cost is estimated at AUD3.6bn (USD3bn), and would be funded, the Commission suggests, by a 0.75% increase in the Medicare levy on taxable income. That would bring the basic Medicare levy up to 2.25%.

The Denticare proposal has provoked widespread debate. The government has yet to give its opinion of all of the Commission’s recommendations.

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