Paying for Dementia Care: 11 Ways to Ease the Financial Burden
About 10 percent of Americans over 65 years old, or 5.7 million Americans, live with Alzheimer’s disease or another form of dementia according to the Alzheimer’s Association. People living with dementia and their families face many challenging situations, not the least of which is paying for dementia care.
According to the Alzheimer’s Association, the 2019 total lifetime cost of care for someone with dementia was estimated at $357,297. Dementia and Alzheimer’s care isn’t cheap, and the financial burden can be stressful during an already difficult time.
Fortunately, paying for dementia care doesn’t have to drain your family’s finances or prevent you from receiving excellent care. Many people can access public and private resources to help cover the costs of helpful resources.
To ensure you’re prepared for both short-term and long-term financial needs, you should begin looking into how you and your family will pay for dementia care early. In this article, we’ll discuss the many aspects of dementia care costs.
Costs of Dementia Care: How Much Can You Expect to Pay?
Dementia care costs vary widely based on the individual, what form of dementia they have and how quickly the disease progresses. The early stages of dementia require less support, whereas the middle and late stages require the highest degree of support, increasing the financial costs.
When calculating costs, remember that people with Alzheimer’s can live for 20 years after their diagnosis and will need care during that time.
The biggest factor influencing the cost of dementia is the care setting you choose.
Cost of In-Home Dementia Care
In-home dementia care is when you hire a home health care worker or a home care worker to come to your home. Home health care services are clinical and include things like wound care and physical therapy. Home care provides non-clinical services like help with bathing, dressing or transportation.
While hourly rates vary by state, home health care services can range from $16-$28/hour and home care services can range from $16-$30/hour. For 44 hours of care a week, that’s about $1,012.
Cost of Dementia Care at Memory Care Communities
Many of those living with dementia find a structured and supportive environment in a memory care community. These are long-term residences where individuals receive the medical assistance and support they need.
Cost of Dementia Care at Adult Day Care Centers
Not all adult day care centers have the staff and services needed to help a person with dementia. Those that do typically do not charge additional fees for dementia patients. The national day-rate for adult day care is $72, however, some centers offer half-day pricing as well.
Some research shows that the cost of care for someone with Alzheimer’s disease can cost nearly $300,000 just for the last five years of their life, compared to $175,136 for heart disease and $173,383 for cancer.
What’s Included in Cost of Dementia Care
There are various costs associated with dementia care, including:
- Doctor’s appointments related to diagnosis and treatment
- Physical therapy or other medical support
- Prescription medications prescribed to slow the progress of the disease
- Medical equipment that becomes necessary as the disease progresses
- Personal care supplies
- Care provided at home or in a community setting
- Safety upgrades at home, like handrails
These costs are variable and depend on your individual needs and journey, so you may have more or fewer costs to consider.
How to Pay for Dementia Care
Medicare will help cover most people’s dementia care costs in one way or another. Medicare is the federal program that assists eligible older adults and others with healthcare costs. In general, if a person qualifies for Social Security benefits, he or she will also receive Medicare. Everyone should apply for Medicare three months prior to their 65th birthday.
Medicare typically pays for inpatient hospital care and some doctors’ fees for people with dementia. Those who purchase Medicare Part D can also receive assistance with prescription drug coverage. In addition, Medicare pays for up to 100 days of skilled nursing home care and for hospice care. The program does not, however, cover long- term memory care costs.
Medicaid is a publicly funded program administered by your state of residence. Medicaid helps cover healthcare costs for people with low income or asset levels. A person with dementia who has used nearly all of their personal resources for Alzheimer’s care costs may be able to access help from Medicaid.
While fewer people qualify for Medicaid, the program typically provides a higher degree of coverage, so if you can use Medicaid, you should. Get more information about Medicaid in Texas here.
Veterans Affairs Benefits for Memory
The U.S. Department of Veterans Affairs (VA) covers some memory care costs for qualifying military veterans. The VA programs that are most likely to provide aide for memory care services include:
- Home-based Primary Care offers home health care to veterans with complex medical needs that can’t be handled in the clinic setting.
- Homemaker or Home Health Aide offers assistance at home to veterans who need help with activities of daily living, like bathing, toileting, and dressing.
- Respite Care provides relief for family members who are providing in-home care by sending temporary help when they need time away.
- Adult Day Health Care offers a place for you or your friend or relative to go during the day for life enrichment and social engagement.
Spouses of military veterans with dementia may also receive support through the VA.
Through its extensive healthcare system, the VA can also help cover doctor’s appointments, dental care, and vision care. Most people who served in active naval, military, or air service and did not receive a dishonorable discharge will qualify for VA benefits and should check with the department as soon as possible.
Long-Term Care Insurance
While less commonly used than many other financial options, long-term care insurance can provide financial assistance for elderly care to people in many different personal situations. A long-term care policy can offer people more options for assisted living and memory care than Medicare, Medicaid, or Veterans Affairs, which are all public programs.
Long-term care insurance can also help pay for dementia care without regard to the financial holdings of the insured. The primary benefit of long-term care insurance is the choice it provides beyond Medicaid-approved options.
To make the most of a long-term care insurance policy, you should purchase the policy earlier. The younger and healthier you are when you purchase the insurance, the less expensive it will be. Most people who rely on long-term care insurance purchase a policy in their mid-50s or before.
State or Local Assistance Programs
Some states offer financial support for people with dementia through a general fund not managed by Medicaid. Many of these programs operate within strict guidelines, such as only providing in-home dementia care or only paying for regular visits to an adult recreation center. In Texas, memory care support falls under the Community Care for Aged/Disabled program. People interested in this option should contact Texas Health and Human Services.
Local governments or municipalities and nonprofit organizations may also offer financial support. To learn more about these options, contact the closest chapter of the Alzheimer’s Association or the closest Area Agency on Aging in Texas.
During the earliest stages of Alzheimer’s disease, some people are able to continue working and can take advantage of employer-provided benefits. It’s important to begin exploring and better understanding these benefits while you’re still at work because there is a possibility that a long-term disability policy could cover a lifetime ailment like Alzheimer’s if the onset occurs during working years. Some of the benefits that are most helpful in these circumstances include:
- Health insurance, which can help cover the cost of diagnosis, treatment, and medications designed to slow the progress of the disease.
- Paid sick leave, which can provide income during times away from work to deal with health issues.
- Short-term disability, which typically replaces a portion of income for up to sick months when the employee is unable to work due to illness.
- Long-term disability, which replaces a portion of pay for longer than six months (and sometimes indefinitely, even after termination) if the employee becomes too ill to work.
If you are diagnosed with a form of dementia while you’re still working, take time to thoroughly review your benefits policies. You can consult with the benefits coordinator, usually housed in Human Resources, or call the insurance companies supplying the coverage directly to ask questions and better understand your coverage.
Retirement plans can provide the funds needed for dementia care for many people, even before they reach retirement age. Typically, individuals pay a penalty when withdrawing money from a retirement account before the age of 59 1⁄2 . However, individuals can avoid this penalty for a qualifying reason. This includes paying for Alzheimer’s and dementia care if expenses are more than 7.5 percent of the individual’s adjusted gross income.
If you have a pension plan you can check the plan’s guidelines to see if it will pay out benefits before retirement age if the individual is rendered disabled.
If you or the friend or relative you’re helping has funds set aside for retirement when diagnosed with Alzheimer’s disease or another form of dementia, consult with a financial planner who specializes in retirement to determine the most advantageous way to withdraw and utilize those funds.
Examples of retirement funds that may be helpful include annuities, pension plans, and individual retirement accounts or IRAs.
Personal Savings & Assets
Personal savings and assets often fund the help needed after a dementia diagnosis.
These funds typically come from:
- The sale of a home and/or estate
- An existing savings account
- Help from friends or family members
However, personal savings can also come from investments or personal property such as fine art or valuable jewelry.
Tax Credits or Refunds
The Tax Credit for the Elderly or the Disabled allows adult children of people with Alzheimer’s or another dementia to claim their parent as a dependent, helping families save thousands of dollars on income taxes. The Child and Dependent Care Credit may also apply to qualifying families. In addition, people may be able to deduct the cost of memory care or home modifications from their taxes.
Under a reverse mortgage, a bank or other lender allows homeowners over age 65 to borrow against the equity in their house while still retaining the title to the property. Families considering this option should talk with their financial adviser about whether a reverse mortgage is right for their situation.
Some lenders provide loans specifically to help families cover the costs of Texas Alzheimer’s care. Anytime you are considering a loan, it’s a good idea to talk to a financial professional and shop around for the best rates and terms.
Quality Dementia Care in Texas
Paying for dementia care can be stressful, but ultimately, finding the right dementia or memory care community can greatly alleviate the burden on you and your family. Memory care can provide a more supportive, positive lifestyle for your relative or friend with dementia, giving them the care and attention they need to enjoy every day.
If you’re looking for memory care in Texas, consider Villages of Windcrest. We provide a comfortable home for residents with dementia in Fredericksburg, Texas, along with an expert staff that can provide the personalized support every individual needs. For more information on our services, contact us online or download our free Memory Care Guide.