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Financial Planning

Alzheimer's Disease promises to be one of the most costly chronic illnesses in America, with a far-reaching impact on elderly persons, their families, and society. The once seemingly unlimited resources of Medicare and Medicaid are diminishing.


Medicare, Medicare supplements, and Medicaid may reimburse many of the expenses for actual health care. However, drug costs are often another problem, as Medicare does not cover drug costs. Medicare supplement insurance policies may provide some assistance, but the coverage of these supplements for drugs does not seem to be extensive. Income-eligible recipients may get some assistance with drug costs from Medicaid, as well as waivers for home and community based care.

Senior opening a prescription bottle.

The supportive health and social services of long-term care in the community is not ordinarily covered by Medicare and Medicaid. Various supportive services are funded under the Older Americans Act, the Community Services Block Grant, and state and local funding. The Veterans Administration may sometimes be able to assist. Some individual communities may have local resources and programs, as well, although resources are scarce and waiting lists can be long. Typically these programs are available to low-income clientele, while people with incomes in the middle range may not qualify.

Families with substantial resources often plan for the expenses of long-term care with the assistance of attorneys, trust officers, and financial advisors. Long-term care insurance can be an effective vehicle to protect assets. Professional health care and social services which offer independent case management or geriatric care management can assist families and individuals in assessing needs, arranging for services, and monitoring quality of care. Assisted living and continuing care facilities with an assortment of support services can provide care in a congregate setting.

Long-term care, either in a community setting or in an institution, is expensive. Depending on the facility, nursing home costs may exceed $35,000 annually. The Medicaid Program is a major funding source for institutional long-term care. But again, Medicaid serves a low-income population, and income and assets are subject to spend-down requirements.

It will become increasingly necessary for family members to finance, or to arrange financing for, the long-term care of the Alzheimer's patient. This care might be provided by a family member, a hired homecare giver, or a nursing home. Some employers, like the Federal Government, may even provide long-term care insurance. It would be wise to investigate employee benefits by contacting the human resources department of the person seeking benefits. At any rate, providing care for the Alzheimer's sufferer will represent an expensive endeavor that can only be met with careful and organized planning.

A group of people at a table having a discussion.


Who will make the necessary decisions?

Alzheimer's disease is a progressive dementing illness. It is important to begin financial planning before patients lose their capacity to make important decisions. The other option is to designate someone else to make the decisions. A Power of Attorney will give the appointed decision maker the authority, but only as long as the patient is still lucid and able to make this decision at the time it is instituted, which is why it must be done before the symptoms of the disease progress too far.



A Durable Power of Attorney is the most comprehensive directive for gaining authority, however, it is not available once the patient has become incompetent due to advanced dementia. This key difference highlights the importance of taking care of financialplanning early, when a diagnosis is first made.


Take an assessment of resources


You will need to make a comprehensive assessment of resources and income. Doing this will allow you to ascertain what is available for meeting expenses. You also will want to take the time to determine which community, state, or government programs apply to your situation. Facing reality concerning finances is important, because some expenses are extremely high. Usually family members can ascertain which assets exist, which long-term care options are practical, and the value of resources; but if not, there are agencies that can help you discover this information. Contact your local Area Agency on Aging to perform a care needs assessment.


Check out these sites for additional information


BrightFocus Foundation

Center for Medicare and Medicaid Services

Social Security Information

Comparing Nursing Homes

Understanding Loing-Term Care Insurance

Last updated 09/09/14.