Alzheimer’s is a progressive disease, gradually eroding both the mind and body of those suffering with the condition. That means people diagnosed with Alzheimer’s often need assistance for an extended period of time, and much of the care most people need isn’t typically covered by insurance. With that in mind, it’s important to explore your options for covering the costs of care.
Understanding costs and care
A diagnosis of Alzheimer’s disease is life-changing in all ways, and in order to best cope with the condition, it’s crucial to learn about the financial aspects of care. Being Patient describes Alzheimer’s as the “most expensive disease in America,” with the average patient having medical expenses totaling $341,000 over the course of treatment. Most families pay 70 percent of that amount out of pocket, so it’s easy to see why it’s necessary to prepare. While insurance will often help with certain expenses, such as medical procedures, the bulk of the care those with Alzheimer’s need is custodial care. Custodial care is the assistance received through places like nursing homes that don’t require skilled medical training. This would include activities like help with dressing, eating and bathing.
Misconceptions, coverage, and considerations
If you are like many people, you might be expecting Medicare and Medicaid to cover long-term care costs. However, Medicare offers minimal assistance relating to nursing homes, and there is no coverage for custodial care. In order for patients to use Medicaid, they must meet strict medical and financial requirements. When contemplating other means to pay for care, one suggestion is to invest in a long-term care insurance policy. Since these policies are designed specifically for long-term care, they are one of the only insurance options that cover custodial care. As far as other avenues for government assistance, veterans, and their surviving spouses can receive help through the Department of Veterans Affairs, although this, too, has restrictions, and certain qualifications must be met.
There are some savings options to consider for funding long-term care costs. You can take a distribution from your retirement savings to help cover care, although one recommendation is to be alert to timing so you can stay within the same year as the expense you intend to pay. Elder Law Answers notes that in a roundabout way, you can purchase long-term care insurance by using your IRA savings and avoid taxes and penalties. For instance, you can purchase a 20-year life insurance policy with a long-term care rider, then pay it off with a direct transfer of funds from your IRA, and in 20 years, your policy will be paid in full. Another source of funds many seniors have set aside is home equity. Home equity loans are one possibility, and for some seniors, a reverse mortgage is a viable choice.
Affordable care options
Finding quality, affordable care is a priority, and it’s a daunting prospect for many families. Relatives often take on the caregiver role for their loved ones by providing assistance at home. However, for working families, this can be challenging. Even if you are able to provide help throughout the day, it’s important to have occasional respite for the benefit of both you and your loved one. There are adult day care centers which can help, and some of them specialize in dementia and Alzheimer’s disease. Another idea is to hire an in-home caregiver on a routine basis. And while it may sound drastic, more seniors are traveling abroad to find affordable care. Thailand and the Philippines are a couple of the more popular options for “medical tourism,” and depending on circumstances, it could be a good fit.
Alzheimer’s care is expensive, so it’s important to explore available avenues to ensure financial solvency. Think through your options to decide which arrangements will work best for you and your loved ones. It’s a difficult journey, but careful planning will bring peace of mind and good quality of life.
–by Lydia Chan, Alzheimer’s caregiver
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