Alzheimer's has been called “the defining disease of the Baby Boomers,” with an estimated 10 million Boomers projected to be stricken with the disease, which typically lasts for eight to 10 years. And if you have a parent or family member with Alzheimer’s today, you know the costs of care can wreak havoc. Consider:
- The average cost of providing care for someone with Alzheimer's is nearly $60,000 a year.
- A private room in a nursing home costs more than $82,000 per year, on average.
- An assisted living community for a resident with dementia runs about $55,000 per year.
- The average rate for unskilled home-care assistance is $21 an hour.
- Medicare generally won't pick up the tab for the type of unskilled care most Alzheimer's patients need, like bathing, dressing and administering medications.
If you're caring for someone with Alzheimer's or think you might someday, consider these resources and strategies to help you, other family members and the patient shoulder the costs:
Plan ahead – way ahead
Don't wait until things are in crisis mode, financially. “Have a meeting with a financial planner or elder law attorney; the earlier the better,” says Beth Kallmyer, senior director of constituent service for the Alzheimer's Association. It's best to have this meeting as soon as someone receives a diagnosis. The Alzheimer's Association has a toll-free hotline (800-272-3900) staffed by professionals who can offer information and advice; the group also has more than 4,500 support groups across the country.
The time to start investigating whether an Alzheimer’s patient might qualify for Medicaid – the federal health program for indigent Americans – is at least five years before he or she might need assistance. That’s because Medicaid reviews five years' worth of financial records to determine if someone would be eligible.
Medicaid doesn't make direct cash payments to individuals or pay for the unskilled home care many Alzheimer's patients need. It does, however, pay all or a portion of nursing home costs for people with Alzheimer's who meet eligibility guidelines for income and assets.
Get a benefits checkup
The federal government offers many cash and quasi-cash (like food stamps) programs to assist elderly, disabled and low-income individuals. Visit the National Council on Aging’s BenefitsCheckup.org site to see which benefits your loved one may be eligible for, including the U.S. Department of Agriculture’s Supplemental Nutrition Assistance Program and Social Security’s Supplemental Security Income benefits.
Look into veterans benefits
If you or either of your parents served in the armed forces, head to the U.S. Department of Veterans Affairs’ eBenefits portal to check for eligibility for medical and financial benefits.
A VA pension pays the difference between the recipient’s annual income and an income limit set by Congress ($12,256 for a single veteran in 2012). So, for example, if the veteran's annual income is $9,000, the VA would provide an additional $3,256 in monthly increments.
Aid and Attendance pays an additional amount (up to $1,644 a month) if the veteran meets certain qualifications, like needing another person to perform certain personal functions required in everyday living.
Veterans and their spouses may also qualify for a wide array of other VA benefits that can help defray the cost of Alzheimer’s, including free or low-cost prescription medications.
Go local and think small
The federal Administration on Aging finances many locally administered assistance programs that could be helpful, too. Call your area Council on Aging (or the agency like it where you live) to find out about such programs as free transportation to medical appointments, free in-home respite care and help with home retrofits (installation of grab bars in the bathroom, for example). You can find your local agency by typing your ZIP code into the Eldercare Locator part of the Administration on Aging's site, eldercare.gov.
Three other potential local sources worth investigating: the local utility company for energy bill assistance and Meals on Wheels or nearby food banks to offset the cost of groceries.
Cash in on life insurance
Under certain circumstances, it may make sense for someone with Alzheimer’s to leverage a life insurance policy to help defray the cost of care.
Howard Krooks, a partner of Elder Law Associates says that someone with a whole-life or universal-life insurance policy might be able to take out a loan against it, to help pay for Alzheimer’s care. This type of loan wouldn’t trigger an income-tax penalty the way that cashing out a life insurance policy normally would.
Some life insurance policies also pay accelerated death benefits to owners with Alzheimer’s. (An accelerated death benefit lets a policyholder get a cash advance against the death benefit if he or she has received a diagnosis of a terminal illness.) If the person requiring care meets the IRS definition of terminally or chronically ill, the benefits will be tax free. Most individuals with advanced Alzheimer’s would meet the IRS’s definition, Krooks says.