Every long-term care plan should consider how to pay for dementia care. The Alzheimer’s Association cites that one-in-nine people over the age of 65 live with dementia, and that figure increases to two-in-ten by ages 71-79. So, planning to pay for memory care is a wise move, and there are plenty of creative ways to go about it.
There are several things that support dementia care planning:
- Have a long-term care plan in place before you need it or as soon as you find out you have a progressive/terminal prognosis
- Early diagnosis
- Meet with a financial advisor before retirement to create a multifaceted plan that accommodates several different scenarios
7 Tips to Paying for Dementia Care
There isn’t “one way” to pay for dementia care. If savings or retirement accounts don’t cover the total expenses, there are other ways to finance the costs.
1. Home care that graduates to residential memory care
The research shows that early transition into full-time memory care is better than later admissions when it comes to mitigating stress and improving the quality of life for the resident.
However, many individuals and clients choose to remain at home using in-home care providers to assist with general support and then make a plan to transition into residential memory care when a certain set of criteria are met (typically related to the progression from early dementia to mid-stage dementia symptoms).
This plan helps to buffer the coffers since home care is more affordable than residential care. Full-time in-home care from a licensed agency costs an average of about $4000 per month, while residential options cost between $4500 to $9000 per month – depending on the community. Saving at the front end using home care options can help you save for the residential care required down the road.
Enrolling in Medicare three months before turning 65 is one of the most important steps you can take to cover care costs during your senior years. While Medicare doesn’t pay for things like room and board at a memory care center, it does typically pay for:
- Medical-related expenses
- Physician/specialist visits
- Necessary durable medical equipment
- Hospice care
Implementing Medicare benefits helps to draw down the total monthly costs associated with dementia care. The modest, additional costs for Medicare Plan C and D can alleviate other costs associated with paying for dementia care.
3. Long-term care insurance
Some people don’t realize they ever enrolled in a long-term insurance plan because it came directly from a previous employer and is debited from pension funds or because their spouse/significant others handled “the business sides of things.”
Comb through all of the financial documents, files, and retirement statements to see if there is an existing long-term care insurance plan you didn’t know about. If so, you may find that thousands of dollars per month are already accounted for.
The sooner you apply for long-term care, the more affordable it is. So, if you’ve arrived at this post while researching long-term care and dementia care options, this is a good time to contact an insurance representative to learn more about whether long-term care is a good option for you.
4. Veterans Administration (VA) benefits
Did you or your significant other serve in the U.S. military? VA benefits are available for a range of services supporting dementia care, including:
- Home-based health and care support
- Home caregivers or health aids
- Respite care (to give a primary spouse or family caregivers regular breaks from the rigors of caregiving)
- Adult daycare (just like its child-centric counterpart, most communities or memory care centers offer adult day care for seniors with dementia so spouses/caregivers can go to their day jobs or attend important activities, outings, and social activities)
- Nursing homes or acute care facilities
- Palliative and hospice care
Visit the VA’s page on Dementia Care to learn more about their services and contact specialists who can answer your questions.
5. Employee and retirement benefits
If the dementia diagnosis is given when you or your loved one are still working, schedule a meeting with the human resources (HR) or benefits department. The company and its employee benefits may offer support you aren’t aware of. This could include things like:
- Better health insurance options
- Paid sick leave
- Short-term or long-term disability benefits
Most retirement plans offer penalty-free withdrawals for individuals younger than 59 and a half under qualifying circumstances. An Alzheimer’s or dementia diagnosis is one of those qualifiers and may allow you to draw early (or more than usual) from the plan, sans penalties, if the total of your dementia care costs exceeds a certain percentage of your gross earnings. Meeting with HR or benefits representatives is essential to learn more about your options.
6. Liquidating properties and assets
Again, meeting with a financial advisor is the best way to understand where you are and your best plan forward. For some couples, this is a time to sell a piece of property or liquidate certain assets or valuables.
For example, if moving a spouse into memory care means you plan to downsize, this might be a time to sell the house and roll part of the proceeds into the memory care fund.
7. Reverse mortgage options
If your home is paid off or almost paid off, you may qualify for a reverse mortgage. Many banks are willing to lend substantial sums of money using the house as collateral because of its real estate value.
Reverse mortgages operate similarly to refinancing. They are available to qualifying homeowners 65 years or older to borrow against the home’s equity without risking their title or selling the home.
8. Personal loans or family contributions
Once you’ve processed the initial shock and adjustment period after an Alzheimer’s or dementia diagnosis, we recommend scheduling a family meeting. The need for dementia care is a matter of “when” rather than “if,” so everyone should have a voice in the plan.
Some families divide care costs and make monthly payments to support their loved one’s care, while others take out a loan to front the costs and then share the monthly loan payment expenses.
Start Visiting Memory Care Centers to Learn More
Visiting different memory care communities is a smart way to learn about all the different ways their clients and families go about paying for dementia care. Make that one of your questions as you learn more about their communities and care costs. Our administrators have a wealth of information regarding funding and payment options.