Dementia is one of the most devastating and costly diseases impacting seniors globally. In fact, more than 46.8 million people are living with dementia around the world, and in 2018 the cost of dementia will surpass $259 billion dollars—an economic impact greater than cancer, heart disease and stroke.
Because it’s so expensive, preparing for the financial impact of Alzheimer’s and other forms of dementia are pertinent when planning for long-term care costs. According to a study by Annals of Internal Medicine in 2015, the average cost of care for a dementia patient averages nearly $290,000 over a five-year period. That’s nearly a third of what the average American family saves for all of retirement.
Though patients may receive the assistance of Medicare and Medicaid, individuals still incur 22% of long-term costs out-of-pocket. These costs include anything from Medicare and other health insurance premiums, deductibles, copayments and other services not covered by supporting programs. On average, Medicare beneficiaries age 65 and older with Alzheimer’s or other dementias paid $10,315 out of pocket annually for healthcare and long-term care services not covered by other sources.*
Without proper planning, though, some older adults incur all of their long-term care costs themselves. Let’s take a look at the average monthly cost of these care services in 2017*:
Homemaker services = $3,994
Home Health Aide = $4,099
Adult Day Health Care = $1,517
Assisted Living Facility = $3,750
Semi-Private Room at a Nursing Home = $7,148
Private Room at a Nursing Home = $8,121
With 50% of Medicare beneficiaries producing less than $26,200 in annual income, these costs would bankrupt an individual within the first year or two of care. And as the population rises, so do the costs. By 2050, total annual payments for healthcare, long-term care and hospice care are projected to surpass $1.1 trillion.
That is why preparing for Alzheimer’s and other forms of dementia are so necessary. By taking precautions and planning early, families have a better chance at preserving their assets, their health, and the wellbeing of their loved ones.