Dementia Care Now More Costly Than Other Illnesses

Studies show that caring for those with memory loss is more expensive than other health issues. Family caregivers face stress and anxiety when juggling caregiving with their careers and family responsibilities. Being prepared ahead of time protects savings and reduces the family burden.

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Dementia Care Now More Costly Than Other Illnesses
6 Min Read November 3rd, 2015 Updated:January 2nd, 2022

Health care costs are high, but a recent research study shows the cost of extended care related to dementia is more expensive and more burdensome than other health issues. Part of the problem is that most dementia care costs are not covered by traditional health insurance, including Medicare and supplements. Medicaid will pay for long-term care services, but you must have little or no income and assets to receive benefits. The result is American families find themselves in a financial crisis, often placing the role of caregiving on a family member.

Health care and caregiving costs for dementia patients tend to be in the final five years of life. The study shows these costs are higher compared to patients with cancer, heart disease, and other illnesses.

The study findings, published in the Annals of Internal Medicine, found that total “social costs” — such as government spending, private insurance, and out-of-pocket expenditures for dementia patients — were 57% greater than costs associated with death from other conditions.

Alzheimer’s Disease Most Common Form of Dementia

Alzheimer’s disease is the most common form of dementia, a progressive condition marked by declines in memory, language, problem-solving, and other skills that enable everyday activities, according to the Alzheimer’s Association. About 5 million Americans have Alzheimer’s. The association said that more than 15 million Americans provide unpaid care for these patients and others with dementia.

“The magnitude of the difference was shocking to me, even though the trend is what I expected.”

 Dr. Amy Kelley, an associate professor of geriatrics and palliative medicine at Icahn School of Medicine at Mount Sinai in New York City.

Quoted in an article in Health.com, Kelly said she feels the vast majority of people don’t have any idea about these costs unless they’re living it.

Dementia - Major Concern for Women

Dementia and long-term care is a significant issue for women. The Alzheimer’s Association says a 65-year-old American woman has a 1 in 6 chance of developing Alzheimer’s disease. That does not count other types of memory loss, such as simple dementia that impacts people, nor does it count early-onset Alzheimer’s, affecting younger people.

Women in their 60’s are also twice as likely to develop Alzheimer’s than breast cancer, according to the Alzheimer’s Association. Experts lament that Alzheimer’s is as significant a threat to women’s health as breast cancer is in every aspect you can measure.

The average total cost per person with dementia five years before death was more than $287,000. That number compared to costs ranging from $173,000 to $197,000 among the other groups. Medicare expenses were similar among patient groups. But, the average out-of-pocket spending for dementia patients was 81% higher than it was for those without dementia.

Long-Term Care Costs are Expensive - Grows Every Year

The LTC NEWS Cost of Care Calculator shows how substantial long-term health care can be, but dementia care is even more devasting. 

Health insurance and Medicare and Medicare supplements will only pay for a short period of ‘skilled care.’ Most extended long-term health care – which includes the supervision related to the care of those with dementia - is custodial and supervisory in nature which is not paid for at all by traditional insurance. 

Long-term care costs vary depending on where you live. You can find the current and future costs of long-term care services where you live, along with state-specific information, on the page for your state on the LTC NEWS Cost of Care Calculator.

Long-Term Care Insurance will pay for this type of care, but you must obtain coverage when you are younger and healthier. This doesn’t help those with care needs now, but retirement specialists suggest Long-Term Care Insurance is something you plan as part of retirement planning.

Finding the appropriate care for someone with dementia can be overwhelming. While it is easier if your loved one owns Long-Term Care Insurance, quality care is essential. These LTC NEWS guides can be beneficial:

Kelley said future research should look more at caregiving-related issues related to dementia, such as if patients’ loved ones are forced to sell their assets to pay for care.

“If we’re finding that the next generation is reducing their work hours or selling their assets or leaving their jobs completely to provide informal, unpaid care. Then we need to ask ourselves as a society what the implication of that is for our economy and that next generation,” she explained.

LTC Insurance is Custom Designed Making it Easy and Affordable

Jesse Slome, President of the American Association for Long-Term Care Insurance (AALTCI), advocates the 'Good-Better-Best' approach to affordable Long-Term Care Insurance planning. The Association offers free access to a video explaining how to reduce the cost.

The American Association for Long-Term Care Insurance is a national trade and consumer advocacy organization focused on educating individuals about the importance of planning for the risk of long-term health care.

The main component of dementia costs is institutional and home-based long-term care—not medical services. Nursing home care plus formal and informal home care represents 75 to 84 percent of dementia costs.

 The Rand Corporation says the total economic cost of dementia ranges from $159 billion to $215 billion annually when the monetary value of informal care is included.

By 2040, the total cost of dementia will increase to as much as $511 billion in inflation-adjusted dollars.

Family Caregivers Face Pressures

As the population of people living with dementia grows, the burden of being a family caregiver increases. Caregiving is physically and emotionally demanding. Caring for a loved one with dementia is even harder.

Paid care services are very costly, with the total payments in 2020 for health care, long‐term care, and hospice services for those aged 65 and older with dementia about $305 billion. Costs of long-term care services have been rising rapidly since 2020, in part due to increasing demand, labor shortages, and the impact of the virus crisis. The costs are overwhelming for people who have not planned with Long-Term Care Insurance or those who are not very wealthy to start with. 

People with little or no assets or those who exhausted assets to pay for extended care may qualify for Medicaid, the medical welfare program. The program will pay for this type of care, but it can be limited. There are Medicaid eligibility requirements and provisions for estate recovery by individual states.

As we get older, we experience changes in our health. Our bodies and minds also decline. The risks of needing help with daily living activities or supervision due to dementia increase with age. Sure, long-term care costs are devastating, but the problem of long-term care and dementia is not just a financial consideration. You need to address the cash flow problems of long-term care - but families are also impacted. 

Adult children usually become default caregivers without planning, something they are untrained and unprepared for. People with Long-Term Care Insurance have the financial resources to address the cash flow issue and can secure their choice of quality care options. However, Long-Term Care Insurance gives loved ones the time to be family instead of caregivers - easing their stress and anxiety.

Don't wait too long to obtain coverage, as these policies are medically underwritten. Most people purchase coverage in their 50s.

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About the Author

An LTC News author focusing on long-term care and aging.

LTC News Contributor James Kelly

James Kelly

Contributor since August 21st, 2017

Editor's Note

Being prepared for declining health and the consequences of aging should be a crucial part of your overall retirement plan. People need long-term care services due to an illness, accident, or the impact of aging. Health insurance and Medicare (including supplements) will not pay for most of these costs.

Family caregivers find it hard to juggle their careers and family responsibilities with that of a caregiver for an older parent. The burden is something most people have said in surveys that they don't want to place on their family.

The solution is affordable Long-Term Care Insurance. LTC Insurance provides guaranteed tax-free benefits to access your choice of quality care options, including care at home. You will protect your income and assets and reduce the stress and anxiety otherwise placed on loved ones.

Planning Tools and Resources on LTC NEWS

You can find many tools and resources on LTC NEWS to assist you in your research for a planning solution or help your family find the appropriate care for a loved one at the time of crisis. 

To help you plan the costs and burdens of changing health and aging, LTC NEWS has put in place several resources, including:

Find all the resources on LTC NEWS - Resources for Long-Term Care Planning | LTC News.

Seek Professional Guidance

Insurance rates are regulated, so no insurance agent, agency, or financial advisor can give you special deals. However, insurance companies' premiums vary over 100% for the same coverage.

Experts suggest using a qualified Long-Term Care Insurance specialist to help you navigate the many options available to you and your family.

A specialist who works with the top companies can match your age, health, family history, and other factors and find you the best coverage at the best value. A specialist will save you money, and you will have peace of mind knowing they are making the appropriate recommendations - Work With a Specialist | LTC News.

Finding Quality Care for Mom or Dad

Start by reading our guides -  

If they are lucky enough to own a Long-Term Care Insurance policy, be sure they use it. Sometimes families wait, thinking they can save the benefits for a rainy day. Waiting on using available Long-Term Care Insurance benefits is not a wise idea. 

Get Help in Filing a Long-Term Care Insurance Claim

Quality care obtained early will help provide a better quality of life and reduce the risk of a deep decline and facility care. If you need help in starting the process of a Long-Term Care Insurance claim, LTC NEWS can help.

LTC NEWS provides free assistance with no obligation to help you or a loved one complete the claims process with a Long-Term Care Insurance policy. We have teamed up with Amada Senior Care, who will do all the work, free with no obligation. 

You can also get support in finding quality caregivers and get recommendations for a proper care plan, whether a person has a policy or not. - Filing a Long-Term Care Insurance Claim | LTC News

Benefits of Reverse Mortgages 

Today's reverse mortgages for those aged 62 and older could be an ideal resource to fund a Long-Term Care Insurance policy OR even provide money to pay for care if you, or a loved one, already needs help and assistance.  

Some people have much of their savings invested in their homes. With today's reverse mortgages, you can find ways to fund care solutions, care itself, even help with cash flow during your retirement. 

Learn more by asking questions to an expert. LTC NEWS columnist and host of the TV Show "62 Who Knew" will answer your questions regarding caregiving, aging, health, retirement planning, long-term care, and reverse mortgages. 

- Just "Ask Mike." - Reverse Mortgages | LTC News.

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You can write a story or ongoing column for LTC NEWS. You can write about many topics, including aging, caregiving, health, lifestyle, retirement planning, and long-term care, to name a few.

Be sure to write for our core target audience of adults aged 40 and older. Our audience is worldwide; however, our primary target is the United States, Canada, the United Kingdom, and other English-speaking nations. 

Improve your website or blog's SEO and gain exposure and traffic at the same time by being a contributor to LTC NEWS. 

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Email your story idea or article: newsroom@ltcnews.com - LTC News Contributors | LTC News

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