According to the Alzheimer’s Association, people 65 and older with Alzheimer’s survive anywhere from four to 20 years with the disease.
Financial planning for someone with Alzheimer’s requires additional steps to ensure they have proper estate planning and the financial resources available to afford medical care expenses. As the disease progresses over an extended period, long-term care costs can grow exponentially, taking a toll on even the most careful financial planning. This article helps shed some light on the financial impact of Alzheimer’s disease and planning for the additional expenses needed for long-term care.
What Is Alzheimer’s Disease?
Before we get into the financial burden that one must experience along with Alzheimer’s disease, let’s first comprehend the disease itself and the change it can cause. Alzheimer’s is a progressive brain disease that scientists and researchers have characterized by the change it causes in the human brain.
Progression of the disease over an extended period limits an individual’s ability to function properly and necessitates the allocation of significant monetary resources for treatment and care options.
“At first, Alzheimer’s disease typically destroys neurons and their connections in parts of the brain involved in memory, including the entorhinal cortex and hippocampus. It later affects areas in the cerebral cortex responsible for language, reasoning, and social behavior. Eventually, many other areas of the brain are damaged. Over time, a person with Alzheimer’s gradually loses his or her ability to live and function independently.” ~National Institute on Aging (NIA)
These changes, loss of memory, language and reasoning decline, and an inability to function and live independently, can impose an immense financial burden often challenging to manage.
Therefore it’s important to plan how one will acquire and allocate the required monetary resources as soon as someone is diagnosed with Alzheimer’s disease. Doing so early can help determine which treatment and care options are available now, and if needed, long-term.
What Are The Available Treatment Options For Alzheimer’s Disease?
Alzheimer’s disease is a complex medical condition, and currently, there are no treatment options available that can completely cure someone battling the disease. However, researchers, in recent years, have made progress pertaining to understanding the disease. Such advancements have helped them develop Alzheimer’s prevention strategies and treatments that slow the progression and help improve the quality of life for the affected.
What Are Alzheimer’s Care Costs In California?
Those suffering from progressed Alzheimer’s require consistent long-term care, including care often not covered by Medicare such as the cost of custodial care. Recent survey reports show that the cost of in-home care in California could be around $6,400, the cost of adult day health care around $1,900, and the cost of care at an assisted living facility around $5,500 per month. Furthermore, the cost of a semi-private room at a nursing facility can be around $10,000 and a private room around $12,900 per month.
Recent studies have measured Alzheimer’s healthcare expenses in California based on the prevalence of the disease and the population projections. These studies take into account community residents and institutionalized people and provide projections of Alzheimer’s care costs for each.
- Alzheimer’s healthcare expenses for community resident patients in California were around $23 billion in 2000, with these costs expected to increase $68 billion by 2040.
- Alzheimer’s healthcare expenses for patients in institutions in California are also expected to be $2.5 billion in 2000, however, these costs are expected to follow a similar trajectory, increasing to $7.4 billion in 2040.
How To Financially Prepare For Alzheimer’s Disease?
Financial planning and preparation for the financial impact of Alzheimer’s disease is often neglected due to the fear and stress it causes. However, it’s important to prepare for the financial impact of Alzheimer’s disease as soon as possible after being diagnosed with the medical condition.
When it comes to planning for Alzheimer’s care costs, begin by taking inventory of your assets, debts, and other financial responsibilities. In addition:
- Identify family members and others to include in the financial plans. Talk with loved ones about your care needs and wishes and discuss financial matters including insurance and financial accounts. Family members and others who are aware of one’s medical condition can help provide support pertaining to planning for, as well as actual provision of, monetary needs and care.
- Review government benefits and long-term insurance policies. Those suffering from Alzheimer’s might be eligible for government benefits allowing them to avail low-cost health coverage and long-term care. In addition, those with Alzheimer’s, having previously served in armed forces, can also avail veteran benefits and receive monetary support.
- Get legal and financial assistance and documents in order. Organize your documents and a filing system as soon as possible for tax, legal and insurance purposes, including important paperwork, account numbers and contact information. The Alzheimer’s Association has a Legal and Financial Worksheet to help with this important step.
- Create or review and update estate planning documents. Specifically important for Alzheimer’s planning is the advance health care directive, also known as a living will. You’ll want to designate a durable power of attorney as well as an executor to help complete your financial responsibilities.
How To Calculate Alzheimer’s Care Costs?
Prior to calculating Alzheimer’s care costs, remember, the disease is progressive, meaning that the Alzheimer’s disease financial burden will likely increase over time. Therefore, it’s essential to forecast all the costs, such as:
- Diagnosis, follow-up appointment, and treatments.
- Medical equipment needed for treatment.
- Expenses pertaining to home safety modifications.
- Cost of prescription drugs and care supplies and services.
What Resources Can Help In Managing or Reducing Alzheimer’s Care Costs?
The financial impact of Alzheimer’s can be overwhelming; however, various resources are available to help alleviate the burden. Some of the resources that can help in managing or reducing Alzheimer’s immediate as well as long-term care costs include:
- Medicare, Medicare Part D, and Medigap.
- Insurance policies that include life and long-term care.
- Returns generated from stock or real estate investments.
- Supplemental Social Security Income (SSI).
- Social Security Disability Insurance (SSDI).
Those suffering from Alzheimer’s might also consider reverse mortgages to help in reducing Alzheimer’s care costs’ associated burden. This allows for converting some home equity into cash while still maintaining the ownership and the ability to reside at home for as long as possible. However, this should only be pursued after seeking assistance from a professional financial advisor.
As a progressive medical condition, Alzheimer’s disease can limit an individual’s ability to think and function properly as time goes on, often necessitating moving to a long-term care facility or home health care support with extensive expenses. Treatment options can help alleviate symptoms, however, these long-term care requirements pertaining to those suffering from Alzheimer’s can lead to a significant financial burden.
We’re here to help you prepare for whatever your future holds, including life’s unexpected curve-balls.
If you or a loved one has been diagnosed with Alzheimer’s disease, please contact us to discuss financial planning to help you prepare for your immediate and potential long-term care needs.