Paying for Alzheimer’s Care

Did you know that ‘5 million Americans are currently living with Alzheimer’s disease, and the National Institute on Aging estimates that that number is going to triple by 2050 — in part due to aging baby boomers.’ (NPR)?

This staggering statistic got me thinking about how many people’s lives will be affected by this disease- and more importantly- how many of them have NO IDEA how they are going to pay for care.

According to the Alzheimer’s Association’s 2009 Alzheimer’s Disease Facts and Figures, Alzheimer’s disease triples healthcare costs for those over the age of 65.

So what exactly does that mean?

It depends on what kind of care you need.

If you choose to care for your parent yourself (in your own home), than the costs are minimal. However, many people find they can’t do this alone and feel the need to hire outside help.

For example- if you are a working person and need to leave the house to go to work-  hiring an caregiver to come to your home for 8 hours a day, will cost you around $200 a day. That can add up to $4000 a month.

Another option is to move to an assisted living or memory care facility- but costs here can be double what you would pay at home- many facilities charge a flat rate and then add on costs for the higher level of care.

What appears to be only $4500 a month in rent can easily become $6000- $7000 a month- after all the care needs/ costs are added in.

According to the Genworth Long Term Care Insurance in the state of Washington a semi private room in a nursing home will cost around $88,633 a year while in home services cost about half that. (1) 

What about Medicare?

According to Paying for Senior Care,  “Medicare does not pay for custodial or personal care that is provided in an assisted living residence but will pay for medical care provided in that location.  The same applies for home care and adult day care; personal care services, or assistance with the activities of daily living which is typically necessary for Alzheimer’s patients is not covered but medical care is covered.”

It’s a common misconception that Medicare is going to cover your medical needs 100%. Unfortunately, this isn’t the case.

What they will cover is short term care in a Skilled Nursing Facility (or Rehab) ONLY if the person has had a 3 day hospital stay (they must be admitted to the hospital-  and stay for 3 midnights).

Even then, Medicare only covers 100% of the first 20 days, then the coverage drops to 80% for the next 80 days- (which seems like a lot, but 80 days will go by very quickly- people with Alzheimer’s suffer for years) and only if you show that you are making progress- which is basically impossible for someone with Alzheimer’s since Alzheimer’s disease is a progressive illness. This means that the structure and chemistry of the brain become increasingly damaged over time. The person’s ability to remember, understand, communicate and reason will gradually decline. “(http://www.alzheimers.org.uk/site/scripts/documents_info.php?documentID=133)

So what can I do?

If you (or your parents) are still healthy- I highly recommend looking into a Long Term Care Insurance plan.

When looking at different plans, do your homework.  Ask around, compare rates and read the fine print!

Make sure to:

  • Look for a plan that covers Alzheimer’s.
  • Make sure the coverage period is long enough to actually help (usually around 3-5 years per person and couples can sometimes ‘share’ the coverage.)
  • Be aware of any exclusionary period – and understand how the days are counted.
  • Inflation protection is a must- the cost of care 10 years from now be the same as it is today.
  • Understand what and how many Activities of Daily Living are required (many policies require the person need assistance with at least 2 or 3 ADL’s)
  • Look for a large company that will still be financially sound in 10 years.

(1)  Genworth Financial

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