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. You can view the videos at www.aaLTCi.org/videos.
The American Association for Long-Term Care Insurance, http://www.aaLTCi.org, 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. You can learn more by clicking here.
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.
About the Author
An LTC News author focusing on long-term care and aging.
Contributor since August 21st, 2017
A complete retirement plan should include a strategy for longevity and the impact that long-term health care will have on you, your family, income, savings, lifestyle, and legacy. This includes the consequences due to dementia. Affordable Long-Term Care Insurance gives you access to your choice of quality care either at home or in a facility.
Remember, Long-Term Care Insurance will pay for long-term custodial care, the most common type of care we will need. Health insurance, including Medicare and Medicare Supplements, will only pay for a small portion of skilled care. Medicaid will only pay if you have little or no savings and income.
You Must Health Qualify to Obtain Coverage
The underwriting criteria are different with each company. You will have to answer some health questions even to obtain accurate quotes. You ideally want to get coverage when you enjoy good health. If you are already receiving care in your home or if you live in a care facility, you would be ineligible for coverage.
Seek Help of a Qualified LTC Specialist
A Long-Term Care specialist can help you determine your eligibility based on your health history and other factors. Most financial planners and general insurance agents are not knowledgeable about underwriting, features, benefits, federal/state partnership programs, policy design, and claims.
Find a qualified specialist by clicking here.
LTC NEWS Cost of Care Calculator
Your research should include finding the current and future cost of long-term care services in the area you live – or plan on living in the future. Use the LTC NEWS cost of care calculator by clicking here.
Other research tools are available, including the Ultimate Long-Term Care Insurance Guide. Review the guide by clicking here.
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Get Expert Help Filing an LTC Insurance Claim
LTC NEWS provides free assistance with no obligation to help you or a loved one complete the claims process with your Long-Term Care Insurance policy.
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.