The Financial Costs of Alzheimer’s: What Are the Options?

Understand the options for covering the costs of care when a loved one has Alzheimer’s or other forms of dementia.

My friend Jane recently came to me saying “I need to talk to you and ask you some questions about Rick’s parents.” Jane and her husband Rick live in an adjoining state from his parents, about three hours away by car. A couple of times over the previous three years she had expressed her concern about them. She thought her father-in-law had dementia, and it was increasingly evident his mother was unable to take care of him by herself.

According to Jane, she and Rick did not know what her in-laws financial situation was. She assumed they had paid off their house, the home Rick and his brother had grown up in. If there were other financial resources, she was not aware. It was never a conversation she had been a part of.

Before long we were on the phone to the county Office on Aging in her in-laws’ county.  I often reach out to this agency first when I am researching options and looking for resources in an unfamiliar area.  As it happens, the social worker who spoke with Jane and me via conference call that morning was very helpful.  She explained the referral process, and what services the county offers for its aging residents.  She gave us some general ideas about costs and eligibility.  It was all done with Jane’s in-laws privacy protected, as she wanted to wait to speak with her husband before giving out any identifying information.

Still, the question that remained was about the finances.  Regardless of what financial resources Rick’s parents had, there were going to be costs, possibly more than they could afford.  What we did know at this point was that Rick’s mother was unable to take care of her husband on her own, and no family was available for caregiving, so it was a good bet outside assistance would be needed.

The "Most Expensive Disease in America"

An October 15, 2014 article in U.S. News and World Report, “An Alzheimer’s Complication: Some Care May Not Be Covered by Medicare," points out that Alzheimer’s disease is the most expensive disease in America.  Alzheimer’s long progression creates the need for long-term care services, the cost of which can financially cripple a family caught unprepared.  Medicare, the article reminds us, is health insurance only, and is not an option when it comes to paying for long-term care, or “custodial care,” the type of care Alzheimer’s and other persons with dementia require.

So, when an elderly loved one with Alzheimer’s or other dementia is in need of care, what are the options for covering the costs? 

Long-Term Care Insurance

If your loved one has a long-term care policy, it can be very helpful with the costs of caregiving. Be sure to read it to understand the appropriate time to access it. A need for assistance with at least two activities of daily living is usually required to access the policy.

Personal Resources

Monthly income can come from Social Security, pensions, annuities, and cash on hand; as well as real estate, IRA’s, savings and other liquid assets. A reverse mortgage is also a tool that can be used to cover the costs of caregivers.

Medicaid

Once someone meets income and asset requirements, Medicaid can be an option to cover long-term care costs. Considered a payer of last resort, Medicaid will cover these costs in a nursing facility, and sometimes in the home.

Veteran’s Benefits

If your loved one is a veteran or the surviving spouse of a deceased veteran, it is worth looking into the benefits offered by the Veteran’s Administration. Contact the VA, either by phone at 1-800-827-1000, or online at http://www.va.gov/.

This Can Be Complicated

In determining the best financial options for your loved one, it is wise to seek professional guidance.  Determining how to cover the costs of care can be a daunting task. Professionals in your local Office on Aging, or an elder law attorney are two options for professional guidance.  Online tools such as the U.S. government’s Benefits Checkup at www.benefits.gov and the National Council on Aging’s site at www.benefitscheckup.org are also valuable resources for information.