How to help your loved one navigate the costs of dementia care

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May 1

By Kate Ashford | NerdWallet

People with dementia who live in long-term care facilities are spending a significant portion of their income each month on care, according to an October 2023 study published in the Journal of the American Medical Directors Association (JAMDA). The study found that the median adult with dementia in an assisted living facility spent nearly all of their income (97%) each month on care, and those with dementia living in nursing homes spent 83% of their income each month on care.

Currently, there are nearly 7 million Americans who are living with Alzheimer's disease, the most common type of dementia, says Monica Moreno, the senior director of care and support for the Alzheimer's Association, a nonprofit that provides support and advocacy for those affected by Alzheimer's disease. "We also know that with Alzheimer's disease, we are talking about a progressive disease that has no cure."

Consequently, as the disease advances, people need more care, and the burden of how to provide that care — and pay for it — often falls to their families.

"A lot of them have made really responsible financial decisions their whole life, but nobody is prepared for this cost at the end of their life," says Dana Eble, public relations and outreach manager at the Alzheimer's Caregivers Network, a support network for care partners. "People didn't even know they needed to save this much money."

From estate planning to home tech gadgets, here are some strategies to help you support your loved ones.

Understand the financial and legal picture

Have a frank conversation about finances. What is your loved one's situation in terms of income and expenses, and how much do they have in savings? How will care costs be covered? And what are their wishes for how they'll be cared for as the disease progresses?

"Don't wait to have these difficult conversations," Moreno says. "Then, when the family is confronted with having to make these decisions, they don't have to question whether they're doing the right things."

Discuss also the estate planning that's in place — or what needs to be done. A solid estate plan typically includes a will, an advance directive and both financial and medical powers of attorney. If the person you care for can do so, a declaration of a pre-need guardian is also useful, says Colleen Carcone, certified financial planner and director of wealth planning strategies at financial services firm TIAA. This allows someone to name the person they would prefer to have as guardian of themselves and their property if they're incapacitated.

"Once you do receive that diagnosis, you know this is going to be coming," Carcone says. "Taking the extra steps to make sure that all of your i's are dotted and t's are crossed is going to be super important."

Reach out to local and national resources

Your local area agency on aging will have information on programs and benefits in your area, such as Meals on Wheels, transportation programs and grocery delivery. Find local locations on the Eldercare Locator search engine at eldercare.acl.gov.

National groups can also be helpful: The Alzheimer's Association, for instance, has a 24/7 helpline and can connect you to state-specific information. For example, Moreno notes a law in Illinois designed to protect a person living at home if their spouse has been placed in a long-term care facility.

"It allows them to keep a certain amount of income every month, and it allows them to keep their primary residence," Moreno says. Some of the more devastating stories, she says, come from families who didn't realize the law existed until after they had spent down all their assets. "These are the types of things families need to educate themselves about," she says.

If your loved one is a veteran, check with the Department of Veterans Affairs to see what benefits they might have access to. "My dad was a veteran, and he got veterans Aid & Attendance benefits, which was cash aid to help pay for the care," says Amy Goyer, AARP's caregiving expert. "That can be extremely helpful."

Use technology

Dementia is a progressive disease, meaning that your loved one will need more care over time. In the beginning, you can save money on care expenses with technology. This might include things like motion sensors, automatic lights, water shut-off devices, medication dispensers and a system that alerts care partners if their loved one leaves the area.

"In earlier stages of dementia, it may be that you're just nervous about them, and you need to have your eyeballs on them and actually see them and know what's going on," Goyer says. "You can use technology to lengthen the period of time before you have to have someone there in person all the time."

Move up the care ladder slowly

Out-of-pocket costs for people with dementia are lower if they're living at home, according to the JAMDA study. At first, providing care at home might mean using a meal delivery service and hiring someone to handle housekeeping and the yard. Then, you may need to hire in-home care for a few hours a day or find an adult day care center in your area.

The daily median cost for adult day health care is $95, according to 2023 cost of care data from Genworth, an insurance company. That's less than half the cost for a home health aide, which costs a daily median of $207.

"A lot of people still don't know that adult day care exists," Goyer says. "That can be a real cost saver. And people can be in an adult day care center — depending on the focus and what their capacity is — pretty far into dementia."

If you reach the point where your loved one needs 24/7 care, a live-in caregiver may be a more economical option than an assisted living facility or hourly care from an outside source, since room and board make up part of their pay. If there's an extra bedroom in the house, it's a viable choice for a loved one who doesn't need skilled nursing care but who can't be left alone.

"We did that for a time with caregivers," Goyer says, "and that saved a little bit of money."

This article was written with the support of a journalism fellowship from the Gerontological Society of America, the Journalists Network on Generations and the Silver Century Foundation.

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