Receiving a diagnosis of dementia, whether the cause is Alzheimer’s, Lewy Body, vascular, or some other type, can be a devastating piece of news to digest. Chances are the person diagnosed has experienced many telltale symptoms even before the diagnosis is made, and often, it’s only in hindsight that the behavioral and personality changes along with memory problems begin to make sense. Diagnosing dementia can be hard as symptoms don’t necessarily appear in a logical progression. Some early warning signs might include apathy, mood swings, lack of impulse control, and inappropriate behavior. Management of money can also be an early tipoff that something may be wrong, and people with dementia often don’t realize that their previous financial skills are slipping away. Bills may go unpaid, unexplained purchases may suddenly appear, and a checkbook may no longer be balanced, among other perplexing financial irregularities.

However, problems handling money is only one of the ways that finances are affected by dementia. As it turns out, a dementia diagnosis and subsequent need for increasing amounts of care can be devastating to the financial health of both the patient and involved family members. A new study published in JAMA Internal Medicine shows just how devastating a dementia diagnosis can be on the wealth of the patient in addition to the finances of family caregivers. According to the study, within 8 years of a dementia diagnosis, patients saw their healthcare out-of-pocket spending more than double and their net worth dropped by more than 60%. Within only 2 years of a diagnosis, dementia patients needed 3 times more hours of caregiving than similarly situated adults without dementia. The costs of that additional unpaid caregiving by the family include not only the physical and emotional costs but also possible lost hours of work and salary and even the possibility of leaving employment altogether to shoulder caregiving responsibilities. Additional signs of financial distress among dementia patients included a rate of application for Medicaid more than double those without dementia. As one of the researchers made clear, “Compared with peers, people with dementia face a rapid rise in unpaid and paid home care, and a major erosion of net worth plus increases in personal spending.” So clearly, the “costs” of a dementia diagnosis- be they financial, physical, or emotional- are enormous, for both the individual and the involved family.

And if help is needed beyond what the family can provide in unpaid care, those costs are equally astronomical, for both individuals along with society at large. With more than 7 million Americans now diagnosed with dementia, it’s been estimated that the costs of care for that population are higher than the costs of caring for cancer and heart disease patients combined. The Alzheimer’s Association has a resource page on its website to help you understand the costs of commonly needed care for a dementia patient, along with the types of paperwork and documentation you will need to get that care. If you’re thinking you may need additional help in the home, A Place For Mom describes the sorts of direct and indirect costs you will face, including hiring help, making home modifications, and paying for medications. Hired help in the home may be more expensive than typical home care attendants because they may need dementia-specific training and certification. Depending on where you live, hourly rates for a home healthcare aide could be anywhere from $21 – $50 /hour. Medicare may cover a limited amount of necessary skilled help in the home but most of the costs will be borne by the patient and family. If you’re looking for in-patient memory care, the costs of that can be significant as well. The average monthly cost for round-the-clock inpatient memory care is about $7000/month, which can potentially be paid with Medicaid, long term care insurance, financing through the VA, or private savings. The costs are clearly enormous and for most of us, potentially insurmountable without serious damage to our wealth. If ever there was reason to think about getting long term care insurance (or adopting healthy aging habits), this should be it.

And society bears much of this cost. It’s estimated that dementia care costs the United States $300 billion/year, and more than ⅔ of that is paid for with government money. In essence, it can be considered a “dementia tax” on all of us, currently assessed at about $600 for every person every year but predicted to rise to $2500 per person per year by 2050, given the current rising rates of dementia cases. So it’s clear we all have a stake in the costs of dementia care, whether we bear them as a patient, family caregiver, or taxpayer. One thing is certain: It’s not a sustainable financing system for caring for dementia patients. Unless as a society we begin to grapple with this, we will all face serious financial problems as we determine how best to care for our citizens with dementia.