The Soaring Costs Of Dementia Care In The US

by Karl on April 7, 2013[printfriendly]

According to a recent study by the RAND Corporation published in the April 2013 New England Journal of Medicine, dementia costs in this country exceeds $157 billion annually. Dementia is more costly than either cancer or heart disease.

Additionally, the costs of dementia could more than double by 2040. Michael Hurd, lead author and economist at the RAND Corporation says “the economic burden of caring for people in the United States with dementia is large and growing larger.

Dementia is an age related chronic illness that includes Alzheimer’s. Dementia can be vascular based due to high cholesterol or high blood pressure. It can also be organic, “cotton” in the brain.

The study showed that almost 15% of people age 70 and older have dementia. Annual cost estimates which include informal care for someone with dementia is about $56,000. The total monetary cost including nursing home care in 2010 was between $157 billion and $215 billion. Medicare paid only $11 billion of this cost.

Dementia is a chronic illness. This type of care is considered long-term care. Costs are paid out of pocket, with long-term care insurance or Medi-Cal if in a nursing home. Medicare does not pay for long-term care.

In an April 4, 2013 New York Times article by Pam Belluck, she quotes Dr. Richard J. Rhodes, director of the National Institute on Aging which paid for the study. ”…we have the baby boomer group maturing, there are going to be more older people with fewer children to be informal caregivers for them, which is going to intensify the problem even more.” 

According to the Alzheimer’s Association, one of the top 5 common signs of Alzheimer’s is the loss of memory that disrupts daily life. An example is forgetting how to say simple words. Instead of saying “watch”, a person with Alzheimer’s will say “hand watch”.

Another memory sign is getting lost in their own neighborhood, forgetting where they are, how they got there and not knowing how to get home. What happened with Dr. Sammy Lee is a recent example.

Another example of memory loss is misplacing items or putting them in unusual places such as an iron in a freezer.

The second top sign of Alzheimer’s is the inability to do familiar things like pay bills, follow a recipe or make a phone call.

The third top sign is vision problems including reading or contrasting colors. Judging the distance between two cars is also a vision problem.

The fourth top sign is a decrease in judgment and decision making. Giving a lot of money to a telemarketer or wearing lots of layers of clothes on a hot day are examples.

Finally, a person with Alzheimer’s shows changes in mood and personality. This may include becoming confused, suspicious, fearful or dependent on a family member. Men often will lose their temper and become violent for an extended period of time.

Research by the RAND Corporation and the Alzheimer’s Association factually demonstrate the financial catastrophe that few individuals and families have planned for. A skewed health care system, demographics and an aging population show that we are on the cusp of a retirement crisis in this country!

There is a lot happening, some good and some not good, to healthcare affecting all ages in California. If you are on our e mail list, you will get updates as they happen. If you would like to be added to our e mail list, please send an e mail request to Jamie [at]

Karl Kim California's 1st Retirement Crisis Planner  Your Medi-Cal Specialist

Karl Kim, CFP, CLTC is the President of Retirement Planning Advisors, Inc. and is a Medi-Cal specialist. His office is located in La Mirada, CA and can be reached at 714-994-0599 or at He has submitted over 1000 applications with a 99.9% success rate over the past twenty years. This is meant to be an educational article. Do not make any decisions solely on the information contained herein. Consult your tax advisor, financial planner and attorney before taking any action. We are not responsible for any inaccuracies or misinformation.











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