Last Updated: March 23, 2009
Alzheimer's disease and related dementias have been called the diseases of the 21st century. The most recent survey on the subject lends even more credence to that claim.
The number of U.S. residents with Alzheimer's disease is increasing annually and the financial planning implications for those and their families suffering from the disease is staggering, according to a report issued by the Alzheimer's Association.
According to the report, 5.1 million U.S. residents older than age 65 have Alzheimer's, 2.7 million of whom are U.S. residents older than age 85. What's worse, the report estimated that the latter number will reach about 3.5 million in 2031, when the first wave of baby boomers reaches age 85.
The report also stated that health care costs for U.S. residents with Alzheimer's are more than triple those of other older U.S. residents. In fact, the cost per patient was at least $33,007 annually, compared with $10,603 annually for an older person who does not have Alzheimer's. What's worse, the cost did not include the 8.5 billion hours of unpaid care for Alzheimer's patients performed by nearly 10 million caregivers – mostly family members – in 2008, the report said.
In addition, U.S. residents ages 65 and older with Alzheimer's are more often hospitalized and treated in skilled-nursing centers than those in the same age range who do not have Alzheimer's, the report noted. The increased medical costs for Alzheimer's patients often include nursing home care and Medicare-covered home health visits, a Kaiser Daily Health Policy Report noted.
So what are the financial planning implications for those afflicted with the disease and their caregivers? What can you and your family do to prepare financial for the possibility of Alzheimer's being a part of your present or future?
According to Karen Henderson Hon, BA, EPC, SM, founder and CEO of Long Term Care Planning Network and author of a Between The Issues article on the subject for the Journal of Financial Planning, there are ways you can prepare the possibility of developing Alzheimer's and loss of independence associated.
First, you should become knowledgeable about the health care system, in particular the long-term care system—its components and costs.
Next, you should discuss the subject "long-term care" with your family and, if you have one, your financial planner. You should do this regardless of your age. "Better planning means better preparation, because a health care crisis can occur at any age," she said. Often, it makes sense to hold a family meeting now, before such a crisis occurs. Find a financial planner.
Henderson also suggests the following questions:
1. How do you see yourself aging? It's important to understand whether Alzheimer's is a distinct possibility or not. Did your parents have long lives? Does Alzheimer's disease run in your family? For its part, the Alzheimer's Association notes that the cause or causes of Alzheimer's disease are not yet known. However, most experts agree that Alzheimer's, like other common chronic conditions, probably develops as a result of multiple factors rather than a single cause. "The number one risk factor is age," Henderson said in an interview. "There's a one in three chance of developing if you're 85 or older." According to Henderson, it's critical that you modify your lifestyle and behavior if you want to forestall or prevent Alzheimer's. That includes eating right and exercising, not smoking and the like. "What's good for your heart is good for your head," she said. In addition, she notes that there seems to be a strong
relationship between Alzheimer's and other chronic conditions such as diabetes, stress, high blood pressure, and obesity.
2. If you were faced with a long-term care need tomorrow, where would the money come from to pay for it? Henderson recommends the purchase of long-term care insurance "if you can afford it." To her, having a policy in place that provides insurance for three to five years with the longest waiting
period could fit your needs though as with all things financial, talking to a planner is the best way to determine what's right for you.
3. Have you had a discussion with your family about how long-term care services would be provided and paid for if you needed care?
Finally, you should take the time to learn the terms and definitions of services such as home care, retirement home care, and nursing home care.
Learn more about the Alzheimer's Association's 2009 Alzheimer's disease Facts and Figures.