The Staggering True Cost of Dementia

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Senior woman and her daughter
SpeedKingz /

Dementia takes a devastating toll on patients and their families. In addition to the physical and emotional anguish, a recent study finds the disease also can ravage a person financially.

Those with dementia see their health care spending more than double while their net worth declines by more than 60% within just eight years of being diagnosed, according to the study published in JAMA Internal Medicine, a journal of the American Medical Association.

For the study, University of Michigan researchers looked at data on about 2,400 adults with dementia. This data covered a period of time from before the onset of dementia until eight years after the diagnosis.

The researchers then compared the data on these dementia patients to data on an equal number of people who did not have dementia but who had similar socioeconomic, medical and health care backgrounds as the dementia patients.

The study participants with dementia had faced multiple types of health care expenses that were higher than those of their peers without dementia. For example, the researchers found that, compared with participants without dementia, those who had the condition were:

  • Much more likely to receive paid in-home care. (Medicare health insurance often does not fully cover such services.)
  • Nearly five times more likely to move into nursing homes within two years of their dementia onset. (Medicare does not cover long-term nursing home care.)

The upshot is that those with dementia saw their net worth drop to from $79,000 to $30,500, on average, within eight years of their diagnosis. Their out-of-pocket medical costs — which included copays, deductibles, over-the-counter purchases and home care — jumped from about $4,000 to around $8,000 within eight years.

By contrast, the study participants who did not have dementia did not see much change in their out-of-pocket health care spending or their net worth, the researchers found.

The drain that dementia places on a person’s financial resources also is evident in the fact that enrollment in Medicaid — the government health care program for people with little income — nearly doubled within the first eight years of a dementia diagnosis.

For the study participants without dementia, there was no spike in enrollment in Medicaid.

In a summary of the findings, HwaJung Choi — the study’s lead author and a health economist and research associate professor at the University of Michigan Medical School — says:

“The differences between these two groups, both in terms of use of care and financial impacts, were even larger than we had expected.”

Family members of the study participants with dementia also were often hit hard after the diagnosis of their loved one. These participants required three times more hours of care from family than participants without dementia.

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