Caregiving Expenses Challenge Adult Children of Parents Who Have Dementia

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Dementia is both a growing and declining medical condition in the United States. The number of people with dementia is growing because the population of older Americans is increasing. There is evidence, however, that the incidence rate of dementia is declining.

About 10% of American adults who are 65 or older suffer from dementia, while another 22% have a milder degree of cognitive impairment. The percentage of people with dementia increases with age. Only 3% of adults between the ages of 65 and 69 have dementia, but the condition impairs 35% of people who are 90 or older. 

A recent study confirmed a decreasing trend in developing dementia and mild cognitive impairment. That hopeful news is partially offset by the reality that America’s aging population will experience a substantial increase in the number of older adults with dementia during the next 25 years.

The rising number of dementia patients will challenge [the American healthcare system. The cost of dementia care, including medical care, long-term care, and hospice care, was estimated to be $290 billion in 2019.

The Cost of Unpaid Caregiving

Caring for parents who suffer from dementia is also challenging for families. The CDC reports that unpaid caregivers, usually members of the patient’s family, provided 18.5 billion hours of care to older adults with dementia in 2019. About two-thirds of unpaid caregivers are women. About one-third are over the age of 65. Roughly a quarter are caring for their own children as well as an aging parent.

While families save money when they take on the work of caregiving, their cost savings are typically balanced by sacrifices. Family caregivers often forego full-time employment to help a parent with dementia. They may choose to work part-time, to sacrifice employer-provided benefits by working from home in the gig economy, or to rely on other family members to provide financial support so that they can devote their time to caring for parents. Regardless of the income they may lose, unpaid givers are more likely to cope with debilitating stress, anxiety, depression, sleep deprivation, and substance abuse than people who are not acting as caregivers.

The Cost of Paid Care

A recent study by researchers from three universities found that people with dementia who pay for caregiving devote most of their income to paying their caregivers. Analyzing data sampled from more than 4,500 adults aged 70 and older, the researchers found that average dementia patients who reside in assisted-living facilities spend 97% of their monthly income on long-term care. 

Dementia patients who live in nursing homes spend nearly 83% of their monthly income on long-term care. While nursing homes tend to be more expensive than assisted-living facilities, the cost of a nursing home for a low-income dementia patient is often covered by Medicaid.

Dementia care is more expensive than residential care for older adults who do not suffer from dementia. The study found that residents of assisted-living facilities who receive dementia care incur out-of-pocket costs of about $3,090 per month, compared to $2,801 for residents who do not suffer from dementia. The average out-of-pocket payment to a nursing home is $3,849 for patients with dementia and $2,176 for residents who do not need dementia care.

While family caregivers provide the majority of assistance to parents who are living in private residences, more than half obtain at least some assistance from paid caregivers. That expense comes to about $1,000 a month.

Who Should Pay for Caregiving?

Families make financial sacrifices to act as unpaid caregivers when they can’t afford to pay for residential care. Medicare does not generally pay the expense of assisted-living facilities or nursing homes, although it may contribute to the cost of certain homecare services for patients whose doctors have certified them as homebound.

Medicaid might help cover the cost of residence in a nursing home. Medicaid does not cover room and board in an assisted-living facility, but Medicaid coverage in some states contributes to the cost of caregiving, including the expense of dementia care.

Seniors who do not qualify for Medicaid might benefit from the federal Program of All-Inclusive Care for the Elderly (PACE). While PACE provides long-term care services to nursing home-eligible seniors in the community, it is not available in every state. It also requires a financial contribution from the recipient that many seniors who suffer from dementia cannot afford.

A recent program in Washington state, the WA Cares Fund, might be a model for other states. The program will pay caregivers who provide assisted living services. Since the benefits are capped, however, unpaid caregivers will continue to provide a large share of caregiving services to family members who suffer from dementia.

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