A new study from the University of Michigan has shed light on the financial burden that a diagnosis of dementia places on families. The study found that among people diagnosed with dementia, out-of-pocket healthcare costs more than doubled within the first eight years. Additionally, patients experienced a reduction of over 60% in their net worth. The study, published in JAMA Internal Medicine, compared participants with dementia to those in the same age group without the condition, finding that the latter group did not see a significant financial change.
Furthermore, the study revealed that dementia patients required triple the amount of caregiving hours two years after symptoms began, and were five times more likely to enter nursing homes within two years. They were also more likely to pay out-of-pocket for in-home care and enroll in Medicaid within eight years of diagnosis.
Lead study author HwaJung Choi emphasized the substantial financial toll caused by dementia, attributing it to the increased use of long-term care due to limitations in physical and cognitive function.
The study highlighted the fact that long-term care services, such as home medical care and nursing home stays, are typically too expensive to be covered by seniors’ own financial resources in the US. This often leads to a dependence on unpaid family caregivers, who can provide insufficient care due to lack of knowledge and resources.
The study’s findings were based on an analysis of the Health and Retirement Study, which examined patient interviews and health exams. It showed that within eight years of a dementia diagnosis, the average wealth of patients dropped from $79,000 to $30,500, while their out-of-pocket medical expenses doubled compared to their peers without dementia.
The Alzheimer’s Association voiced concerns about the financial burden of dementia, noting that it could bankrupt families. The vice president of health policy for the organization, Matthew Baumgart, highlighted the lifetime expectancy following a dementia diagnosis, which averages four to eight years but can extend up to 20 years. He emphasized the escalating costs of care as dementia symptoms worsen and the burden on caregivers increases.
The study also projected that the national cost of caring for individuals with Alzheimer’s or other dementias will reach $345 billion by 2023, with an estimated increase of $24 billion from the previous year. Without new treatments, these costs are projected to reach nearly $1 trillion by 2050. The report also highlighted the burden on caregivers, who provided an estimated 18 billion hours of unpaid care in 2022, valued at almost $340 billion.
One potential solution to alleviate some of the burden is long-term care insurance, but experts noted that Medicare and private insurance are better at reimbursing acute care needs rather than the long-term expenses of caring for cognitively impaired individuals.