Health care costs are high but a new research study shows the cost of extended care related to dementia is more expensive and more burdensome than other health issues. Much of the caregiving costs for these people are not covered by traditional health insurance or, for those 65 and older, Medicare. This means the cost of care is out-of-pocket placing a financial burden on the American family.
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 suggests.
The study findings were published online Oct. 26 in the Annals of Internal Medicine. The research 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 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. More than 15 million Americans provide unpaid care for these patients and others with dementia, the association said.
“The magnitude of the difference was shocking to me, even though the trend is what I expected,” said study author 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.
This is a real big 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 type of memory loss such as simple dementia that impacts people, nor does it count early onset Alzheimer’s which impacts younger people.
Women in their 60’s are also twice as likely to develop Alzheimer’s than breast cancer, according to the report — “2014 Alzheimer’s Disease Facts and Figures” — from the Alzheimer’s Association.
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, the study showed.
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 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.
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 that 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.
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 videos can be found at www.aaltci.org/videos.
Slome says consumers interested in no obligation Long Term Care insurance cost comparisons can call the organization at 818-597-3227 or visit the AALTCI website.
The American Association for Long-Term Care Insurance, http://www.aaltci.org, is the national trade and consumer advocacy organization focused on educating individuals about the importance of planning for the risk of Long Term Health Care.
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. 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.
By 2040, the total cost of dementia will increase to as much as $511 billion in inflation-adjusted dollars.
For those with little or no assets, or for those who had to spend-down 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. You can learn more at: http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Eligibility/Eligibility.html
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