Face up to age, health

RE­TIRE­MENT HEALTH­CARE COSTS: ILL HEALTH A RE­AL­ITY OF AGE­ING

The Citizen (KZN) - - Personal Finance - Eric Jor­daan Ef­fects of age­ing De­men­tia

Your past med­i­cal his­tory is no in­di­ca­tion of your fu­ture ex­pen­di­ture.

While your re­tire­ment in­come is likely to keep pace with in­fla­tion, greater than CPI in­creases in med­i­cal costs mean health­care ex­penses will con­sume a big­ger portion of your in­come ev­ery year.

Med­i­cal aid pre­mium in­creases out­strip con­sumer in­fla­tion each year 3% to 5%.

There are also late joiner penal­ties and ex­clu­sions, and other med­i­cal ex­penses not cov­ered by med­i­cal aid.

As you age, mov­ing onto a more com­pre­hen­sive med­i­cal aid plan with a gap cover ben­e­fit is an im­per­a­tive.

This can have se­vere im­pli­ca­tions for post-re­tire­ment cash­flow at a time when one’s health is gen­er­ally de­te­ri­o­rat­ing too.

As peo­ple grow older, so their abil­ity to see, hear, com­mu­ni­cate, walk, re­mem­ber, con­cen­trate and care for them­selves is af­fected.

In its ‘Pro­file of older per­sons in SA’, Sta­tis­tics SA es­ti­mated:

38% of South Africans over 60 use chronic med­i­ca­tion;

20% use as­sis­tive de­vices such as spec­ta­cles

10% wear hear­ing aids (costs R5 000 and R60 000) and

5% use wheel­chairs (R2 000 to R90 000).

Th­ese as­sis­tive de­vices and other aids are ex­pen­sive and not al­ways cov­ered by med­i­cal aid.

Over 50% of peo­ple aged 60 plus live in ex­tended house­holds which re­in­forces the fun­da­men­tal role that fam­ily plays dur­ing one’s re­tire­ment years, es­pe­cially as one ages.

The same re­port shows 11% of over 60s have prob­lems com­mu­ni­cat­ing, 45% have dif­fi­culty walk­ing or climb­ing stairs, and 34% have prob­lems re­mem­ber­ing or con­cen­trat­ing, mak­ing some form of at-home care es­sen­tial.

Men­tal ill­ness is a big cost driver in re­tire­ment, es­pe­cially with de­pres­sion and anx­i­ety.

Ac­cord­ing to a study by the Lon­don-based In­sti­tute of Eco­nomic Af­fairs, the like­li­hood that some­one will suf­fer from clin­i­cal de­pres­sion ac­tu­ally goes up by about 40% af­ter for­mal re­tire­ment.

De­men­tia is the lead­ing cause of dis­abil­ity and de­pen­dency in the el­derly – with age be­ing the sin­gle biggest risk fac­tor for its devel­op­ment. It’s es­ti­mated 20% to 40% of South Africans over 65 have de­men­tia, with the av­er­age life ex­pectancy be­tween eight and 12 years.

There are enor­mous eco­nomic and med­i­cal costs as­so­ci­ated with car­ing for some­one with de­men­tia, which can cost any­thing be­tween R3 mil­lion and R7 mil­lion, over the per­son’s ex­pected life span. Pre­scribed min­i­mum ben­e­fits are only re­quired to cover ad­mis­sion for the ini­tial di­ag­no­sis and man­age­ment of acute psy­chotic symp­toms for one week. There­after, cover de­pends on the ben­e­fits of your par­tic­u­lar plan op­tion. Most med­i­cal schemes don’t pro­vide cover for ac­com­mo­da­tion and care ser­vices as­so­ci­ated with de­men­tia.

Most fam­i­lies un­der­take to care for their fam­ily mem­ber at home but com­pletely un­der­es­ti­mate the enor­mity of the job.

It’s es­ti­mated that in the last five years of life, to­tal health­care spend for de­men­tia pa­tients is al­most 60% greater than the costs as­so­ci­ated with death from other dis­eases, in­clud­ing can­cer and heart dis­ease. This doesn’t ac­count for costs in­curred in the years be­fore the di­ag­no­sis is made.

Thus health­care costs should be carefully as­sessed when de­vel­op­ing a re­tire­ment plan.

20% to 40% over 65 have de­men­tia

Eric Jor­daan is at Crue In­vest

Picture: Shuttersto­ck

PLAN AHEAD. It’s wishful think­ing to not plan ac­cord­ingly for the high costs of post-re­tire­ment health­care, be­cause ill-health goes hand-in-hand with age­ing, says the author.

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