A dementia diagnosis can devastate a family, imposing emotional and psychological strains in caring for a loved one. Beyond medical expenses, the financial burden can be overwhelming. In this article, we delve into the extensive costs associated with dementia treatment and care.
Dementia encompasses various brain disorders impairing one’s ability to perform daily activities independently. Symptoms include memory decline, difficulty making complex decisions, and managing finances, making sufferers vulnerable to fraud and scams. Beyond memory and decision-making, dementia impacts behaviour, language, motor skills, and the ability to recognize people and places. Early diagnosis is challenging, with degenerative brain changes potentially starting 15 years prior. Life expectancy post-diagnosis ranges from 5 to 15 years, depending on the type – and in advanced stages, most dementia sufferers require full-time care.
Medical aids typically offer minimal coverage for dementia. While “treatable dementia” is a Prescribed Minimum Benefit, schemes only cover the initial diagnosis and one week of acute psychotic symptom management. Unless enrolled in a fully comprehensive medical aid, most plans exclude home nursing, and those that include it are costly with limited benefits. Dementia sufferers face expenses for medication to slow disease progression, manage anxiety and depression, and control behavioural issues like hallucinations and paranoia. Additionally, consultations with geriatric psychiatrists, scarce in South Africa, can exceed R3 000 per session.
However, with very few South Africans in a position to retire comfortably, the reality is that where a retiree is diagnosed with dementia, the financial burden often falls to the immediate family of that person – and the economic costs are difficult to quantify. Home nursing is unaffordable to most families and can cost anywhere between R8 000 and R30 000 per month depending on the level of care required – bearing in mind that dementia care is a specialist field of nursing which, in most instances, is required in the more advanced stages of the disease. For families who cannot afford such care, the burden often falls on the economically active members of the family, particularly women which, in turn, can impact the family’s financial security and income generation.
While many retirement villages offer frail care and assisted living, specialized dementia care facilities are scarce and expensive. Costs can range from R25 000 to R75 000 per month, making them unaffordable for most South Africans. A dread disease policy can provide financial relief, allowing claims based on the illness stage and the patient’s ability to perform daily activities. Despite potential payout conditions, dread disease cover is an excellent way to mitigate the financial risks of a dementia diagnosis, offering crucial support for families facing the high costs of specialized care.
The estate planning mechanisms required to assist with the management of a dementia patient’s affairs also come at a price. Where someone has an early dementia diagnosis, setting up a Special Trust Type A to house the assets of the patient is a useful option for managing their financial affairs, although naturally there are costs involved in setting up and managing a trust. Another option is to bring an application to the High Court for the appointment of a curator bonis to look after the dementia patient’s affairs, although this is costly and somewhat impersonal, and can cost anywhere between R50 000 and R100 000. Further, this process is cumbersome in that all steps taken by the curator bonis must be signed off by the Master, and the curator bonis has limited power of investment which can have adverse financial consequences for the person’s estate.
A more affordable option is provided in terms of the Mental Health Care Act which allows a person to apply to the Master of the High Court for an administrator to manage the affairs of a dementia sufferer. This process is fairly simple and can cost anywhere between R5 000 and R20 000 depending on whether you use an attorney for the application. In terms of the process, the application must be lodged directly with the Master in whose jurisdiction the dementia patient resides, together with medical evidence in support of the application which clearly confirms the person’s mental incapacity. Once appointed, the administrator has the power to take care of and administer the property of the dementia patient, although the Act makes it clear that the administrator’s powers must be proportionate to the mental health status of the person concerned.
Where a person has been diagnosed with dementia but still has mental acuity, it is advisable to ensure that they check and update their Will because, as the disease progresses and their mental capacity declines, it will not be legally possible to do so. At the same time, the dementia patient might also want to consider drafting a Living Will and/or an Advance Healthcare Directive, which are very useful end-of-life documents providing guidance to loved ones, doctors, and carers on how they wish to be cared for medically once they become mentally incapacitated.
We all hope dementia won’t affect us or our loved ones but, with age being the greatest risk factor, the longer we live, the higher our chances of a diagnosis. It’s therefore critical that every retirement plan includes a ‘what if’ dementia scenario to prevent unnecessary financial burdens on our loved ones. Planning ahead ensures we are prepared for the potential costs and challenges that come with dementia care.
Have a wonderful day.
Sue
