Dementia's Growing Shadow: A Looming Challenge for Families and Finances

Dementia, a debilitating group of brain disorders characterized by progressive cognitive decline, casts a long and ever-growing shadow across the globe. Its impact extends far beyond individuals, deeply affecting families and presenting a significant financial burden.

The numbers paint a concerning picture. According to the Alzheimer's Association, over 55 million people worldwide live with dementia in 2023, with an estimated 10 million new cases every year. This figure is projected to rise dramatically, reaching nearly 153 million by 2050. This alarming trend highlights the urgency of addressing this global challenge.

The numbers seem grim, but research is moving forward quickly. Testifying at a recent House Committee meeting, Joanne Pike, DrPH, Alzheimer's Association president and CEO, and Alzheimer's Impact Movement (AIM) CEO, said advances in research are important because Alzheimer’s impacts real people.

We have so much to be excited and hopeful about. We know — many of us personally — how important these advancements are for real people — our families, our friends, our neighbors.

Numbers Increasing

In the U.S., about 10% of adults aged 65 and older are living with dementia, according to a Columbia University study. A study by the Journal of the American Medical Directors Association highlights the high cost of long-term dementia care, which can lead to overwhelming expenses for patients and their families. This research, conducted by experts from Georgia State University School of Public Health, the University of Washington School of Pharmacy, and the University of California at San Francisco, involved 4,500 adults, with 40% showing signs of dementia and 60% without.

The study found that the monthly out-of-pocket expenses for those with dementia averaged $3,090 for in-home residential care and $3,849 for facility care. In contrast, costs for those without dementia were less. 

Individuals with dementia face a higher risk of incurring catastrophic out-of-pocket costs for long-term care compared to those without dementia. Among adults with dementia receiving in-home care, the out-of-pocket expenses reached $4,566 for the top 25% of spenders and escalated to $7,500 for those in nursing homes.

Remember that long-term care costs vary dramatically depending on where someone lives and their required services. The LTC NEWS Cost of Care Calculator illustrates the median costs nationwide based on metro areas within each state.

• LTC NEWS Cost of Care Calculator - Find Your Location

Long-Term Care Costs Mostly Falls on You

The study's authors pointed out that the existing system typically requires individuals or their families to cover the costs of these services. 

Traditional health insurance and Medicare, including supplements, only cover short-term skilled care. Medicaid provides for long-term care, but only if the recipient has minimal income and assets. This situation places the burden on an individual's personal income and assets to pay for care. Otherwise, it leaves family caregivers to shoulder the responsibility.

Long-Term Care Insurance, which necessitates fairly good health to get coverage, will pay for all types of long-term care services, including memory care. However, an LTC policy is usually purchased before someone retires when their health is generally much better.

These figures underscore the significant financial strain on older adults and families paying for long-term care, particularly for those with dementia, who represent a large portion of care users.

Individuals often need long-term care because of chronic illnesses, mobility problems, frailty, and dementia. As life expectancy increases, so does the demand for long-term care, significantly impacting American families and their financial stability.

Quality Care is Vital

Long-Term Care Insurance is increasingly recognized as essential to thorough retirement planning. Although securing an LTC policy is crucial, it doesn't address the needs of many older adults who cannot obtain coverage and are left to navigate the challenges of aging on their own. This situation places a significant financial strain and emotional burden on both the individuals and their families.

The task of locating high-quality long-term care services for loved ones, whether at home or in a facility, is increasingly falling on families. Finding the appropriate care is not easy. To aid in this search, the LTC NEWS Caregiver Directory is the most extensive free resource in the United States, offering a platform to find caregivers and facilities in your area.

• Long-Term Care Services Directory | Find Care Near You

Family Burden

The emotional and practical toll on families caring for loved ones with dementia is immense. Spouses, children, and other relatives often take on the responsibility of providing daily care, which can involve managing complex medical needs, emotional support, and assistance with daily activities. This role leads to stress, burnout, and social isolation for caregivers, significantly impacting their well-being and quality of life.

Financial Strain Growing

Long-term care costs are increasing rapidly due to rising demand for care, labor shortages, and increasing labor costs. The Alzheimer's Association estimates the global cost of dementia in 2023 to be $1.3 trillion, with direct medical and social care costs exceeding $1 trillion. This burden falls heavily on families, who often face out-of-pocket expenses for home care, assisted living facilities, and nursing homes. Additionally, lost productivity due to caregiving responsibilities can further exacerbate financial strain.

Seeking Solutions

Addressing this multifaceted challenge requires a multi-pronged approach. Investing in research remains crucial for developing effective treatments and potential cures for dementia. 

Rep. Paul Tonko (D-N.Y.) says families need support for this growing problem.

Since my first days in Congress, I've pushed for strong action to support those living with Alzheimer's by driving medical research, federal coordination, early detection and public health infrastructure. And of course, support for caregivers.

Two groups that work on Alzheimer's disease, the Alzheimer's Association and the Alzheimer's Impact Movement, are supporting legislation introduced in Congress. 

The NAPA Reauthorization Act would continue funding for an existing program that helps fight Alzheimer's disease. The second bill, the Alzheimer's Accountability and Investment Act, would make sure that Congress hears from scientists about what they need to find a cure and better treatments for Alzheimer's disease.

These bills are essential because they could help us learn more about Alzheimer's disease and find ways to prevent and treat it.

Robert Egge, Alzheimer's Association chief public policy officer, and AIM executive director, is happy with the bipartisan support for these critical bills, with 65 cosponsors in the House and 27 in the Senate for the NAPA Reauthorization and 45 cosponsors in the House and 24 in the Senate for the Alzheimer's Accountability and Investment Act.

These bills reaffirm our nation's commitment by helping to secure federal investments in Alzheimer's research and improve access to better quality care and support services for individuals living with Alzheimer's and their caregivers. We look forward to working together to pass these bipartisan bills and help improve the lives of those impacted by Alzheimer's and other dementia throughout the nation.

Additionally, supporting families through caregiver training, respite care programs, and financial assistance is essential. Meanwhile, individuals planning for their retirement should also consider the impacts of aging, which encompass the need for long-term and memory care, as part of their overall retirement strategy.

Long-Term Care Insurance offers an affordable solution to guarantee access to high-quality care services while protecting income and assets and reducing the burden on families.

• How To Apply For Long-Term Care Insurance

The cost of care services will continue to increase in the years ahead. Most people start looking at LTC Insurance in their 40s or 50s, but affordable options can be found if you are in your 60s or even older, depending on your health. Seek help from a qualified LTC Insurance specialist who works with top-rated insurance companies to match your age and health with the most affordable options. 

Ignoring the issues of dementia and aging is no longer a viable strategy due to the significant impact declining health and memory can have on your family and finances. With a variety of planning options available, taking action while you are still in relatively good health is a wise approach to tackle this increasingly common challenge.