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A great deal of emphasis is placed on the emotional and mental impact of dementia — but a new study from the University of Michigan highlights the financial burden it puts on families as well.
Among people who were diagnosed with dementia, out-of-pocket health care costs more than doubled within the first eight years, researchers found.
Dementia patients also experienced more than a 60% reduction in their net worth, according to the study findings, which were published in JAMA Internal Medicine.
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By comparison, participants in the same age group who did not have dementia didn’t see a significant financial change, the researchers found.
Beyond the financial burden, a dementia diagnosis also resulted in a higher time requirement from others, the study found.
A new study from the University of Michigan highlights the financial burden that a diagnosis of dementia puts on families. (iStock)
Two years after symptoms began, dementia patients required triple the amount of caregiving hours than those without the condition.
Also impacting patients’ finances was the need to enter nursing homes — which happened five times more for those with dementia within two years.
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Dementia patients were also more likely to pay out of pocket for in-home care, the study found.
In addition, researchers found that people with dementia were more than twice as likely to enroll in Medicaid within eight years of diagnosis, a sign of financial distress.
"The substantial financial toll is likely attributable to a sharp increase in the use of long-term care, as people with dementia often need extensive and comprehensive care due to limitations in both physical and cognitive function," lead study author HwaJung Choi, a research associate professor at the University of Michigan, told Fox News Digital.
Long-term care services such as home medical care and nursing homes are usually too expensive to be covered by many seniors’ own financial resources in the U.S., the study author noted. (iStock)
Long-term care services such as home medical care and nursing homes are usually too expensive to be covered by many seniors’ own financial resources in the U.S., Choi noted.
"Family and other unpaid care increased sharply at the onset of dementia — from 12 hours at baseline to 45 hours per month less than two years since the onset of dementia," she said.
"We found that, without family members available to provide care at baseline, the rate of nursing home stays would be considerably greater at the onset and over the course of dementia."
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Lack of skilled providers can also contribute to the cost increase, noted Dr. Elizabeth Crocco, M.D., medical director of the University of Miami's Memory Disorders Clinic Center for Cognitive Neuroscience and Aging in Miami, Florida, who was not involved in the study.
"Many paid care providers and clinicians are not well-versed in caring for a geriatric population, and they lack the knowledge and resources that can potentially slow the progression of the disease and prevent the behavioral disturbances that are often the main cause of needing more assistance," she told Fox News Digital.
Long-term care services such as home medical care and nursing homes are usually too expensive to be covered by many seniors’ own financial resources in the U.S., the study author noted. (iStock)
They may also lack the ability to minimize complications in medical settings, leading to an increased length of stay in hospitals, rehabs and long-term care facilities, Crocco added.
The findings came from an analysis of the long-running Health and Retirement Study, which compiled patient interviews and health exams.
Within eight years of a dementia diagnosis, patients’ average wealth had dropped from $79,000 to $30,500.
Data for nearly 2,400 adults with dementia was compared to the same number of older adults who did not have the condition, but shared similar status in terms of health and socioeconomics.
"The study suggests that two persons who have comparable demographic, socioeconomic, and physical and cognitive health conditions would have profoundly different life experiences if one had a dementia onset but the other did not," Choi said.
Breaking down the numbers
Before their dementia diagnosis, the study participants had an average net worth of $79,000 after accounting for all assets and debt, the researchers found.
Their average annual out-of-pocket medical spending was $4,000.
Also impacting patients’ finances was the need to enter nursing homes, which happened five times more for those with dementia within two years. (iStock)
Two years after a dementia diagnosis, patients’ wealth had dropped to $58,000 and their out-of-pocket medical expenses had spiked to $8,000 per year.
Those changes did not occur for the participants without dementia.
After an eight-year period, the dementia patients’ net worth had dropped to $30,500, and they had spent twice as much on health expenses as their peers without dementia.
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"Costs can easily be a driving factor for patients and families to cut corners in supervision, basic care and medical needs," said Crocco.
"When dementia patients do not get the care they need, it can lead to a cycle of worsening medical and mental health that will more rapidly cause a deterioration in their disease state."
The study's limitations
There is the possibility of some reporting errors in the study, Choi acknowledged, because all measures were self-reported by patients and/or their families.
Two years after symptoms began, dementia patients required triple the amount of caregiving hours than those without the condition, a study has found. (iStock)
"However, it is unlikely to affect the difference in the outcomes because proxy reports and interview modes were also included in the matching process," she told Fox News Digital.
The study also did not take into account how the impact may differ according to the cause of dementia — for example, between Alzheimer’s disease and stroke.
‘Not a one-time expense’
"We have long noted that Alzheimer’s could one day bankrupt Medicare, and this study confirms that dementia is also bankrupting families," Matthew Baumgart, vice president of health policy for the Alzheimer's Association in Washington, D.C., said in a statement to Fox News Digital.
Baumgart was not involved in the Michigan study.
"Even when everything else is the same, this study shows that adding dementia to the equation changes things dramatically for affected individuals and their families."
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Dementia is not a one-time expense, Baumgart also pointed out.
The lifetime expectancy following an Alzheimer’s or dementia diagnosis is four to eight years on average, but can be as long as 20 years.
"As dementia symptoms escalate, so does the person’s care needs, the cost of care and the burden on caregivers," Baumgart said. "The costs incurred by families can go on for a very long time, and unfortunately, most families are not financially prepared and the system too often does little to help."
"Even when everything else is the same, this study shows that adding dementia to the equation changes things dramatically for affected individuals and their families."
In 2023, the national cost of caring for individuals living with Alzheimer’s or other dementias is projected to reach $345 billion — a $24 billion increase from a year ago, according to the Alzheimer's Association 2023 Facts and Figures report.
By 2050, these costs will rise to nearly $1 trillion dollars unless new treatments are advanced.
Researchers found that people with dementia were more than twice as likely to enroll in Medicaid within eight years of diagnosis. (iStock)
There is also the caregiver burden; it is estimated that more than 11 million family members and friends are currently caring for Alzheimer’s patients.
In 2022, these caregivers provided an estimated 18 billion hours of unpaid care — valued at almost $340 billion, the report stated.
Potential solutions
One possible way to reduce some of this burden is to get long-term care insurance — but that’s not a surefire solution, experts say.
"Medicare and private insurance are much better in reimbursing acute care needs, but not the long-term expenses of caring for a cognitively impaired individual that are needed every day," noted Crocco.
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"For those lucky enough to have long-term care insurance policies that can help alleviate those costs, newer policies are more expensive and much more limiting in the help they can provide."
Choi recommends that family members begin discussing care allocations and transitions before the onset of dementia, as it can be more difficult to make these decisions after symptoms have progressed.
It is estimated that more than 11 million family members and friends are currently caring for Alzheimer’s patients. (iStock)
"Policymakers should also facilitate the public’s awareness of the financial and non-financial impacts and address the shortage of resources for patients with a high risk of dementia and their families by improving and broadening public long-term care programs," said Choi.
She also pointed out that there can be "substantial differences in potential care resources," based on a patient’s demographic and socioeconomic status.
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"Depending on the potential resources like family availability and community care services, the care options and costs would vary a lot," he said.
"Therefore, it is critically important to understand the disparities in care resources, which should inform public policy for developing effective care programs for people with dementia and assessing and reducing burdens on individuals, families and society."