With one in seven Americans over age 71 suffering from dementia, many families are familiar with the emotional and financial devastation caused by the disease. While the emotional cost is difficult to quantify, Mt. Sinai Medical Center recently published the first ever study documenting the financial costs of dementia in the last 5 years of life.
The numbers were staggering - out of pocket costs for dementia are 81% higher than any other cause of death. On average, families spent $237,000 for care during the last five years alone. Despite the high cost of drugs and treatments available to cancer and heart disease patients, their expenses were nearly $70,000 less. The study found the highest costs for dementia (as a proportion of household wealth) were associated with patients who were black, had no high school education, or were widowed or unmarried women. As lead study author Dr. Amy Kelley put it:
"The families of patients with dementia have more expenses than other families, and the financial burden is greatest among families that may be least able to manage it."
Geriatrician and Professor at Mt. Sinai Dr. Diane Meier said most families find themselves completely unprepared for the costs associated with dementia, believing that Medicare (or Medi-Cal in California) will pay for care. Not so - or at least, not obviously so. Medicare and California's Medi-Cal generally do not cover costs most crucial to those suffering from chronic diseases such as non rehabilitative nursing home care, or in home care, unless one is at the poverty line. Dr. Meier noted that when Medicare laws were written in the 1960's, chronic diseases that persisted for many years - decades even - were not an issue the way they are today. Today, old age is often characterized by individuals needing help on a consistent day to day basis. For most, Medicare/Medi-Cal does not pay for that . And this is primarily where large out of pocket costs for patients with dementia comes from.
Is this level of expense really necessary? Many families are spending their own money for the care of a loved one with Alzheimer's or dementia when the state could be footing the bill. Because they are unaware of how Medi-Cal laws work, or have failed to adequately plan for Medi-Cal eligibility, I have seen families spend thousands upon thousands of dollars that could have been avoided. As an Elder Law Attorney, I view this as an additional tragedy of dementia.
Mt. Sinai's study focused not only on the higher medical costs of patients with Alzheimer's or dementia, but also the opportunity costs associated with caring for the patient. For example, a daughter who quits her job in order to care for her elderly mother. In this case, the daughter has lost the opportunity to earn income, which is essentially the same as an out of pocket expense. In some instances, family members are able and willing to devote significant amounts of time and energy to the care of a loved one with dementia. But for many, the cost is too high. In cases where the ill spouse or parent needs round the clock care, a secure nursing home environment is often the best choice - or the only option. What many Californians fail to realize is that Medi-Cal will pay for this, assuming the patient qualifies for Medi-Cal. Many people do not realize that their spouse or parent could potentially qualify for Medi-Cal, if they plan ahead. Generally, individuals may only qualify for Medi-Cal if they are essentially at the poverty line - specifically, their resources and income are within Medi-Cal limits and they qualify as "medically needy." If a patient does not qualify, there is a legal process that can enable them to qualify. In the legal field, this is called "Medi-Cal Planning." In other words, planning to become eligible for Medi-Cal when one is not already so by default.
An experienced Elder Law attorney who specializes in Medi-Cal can legally help to make the ill spouse or parent eligible for Medi-Cal.
For many people, an elder law attorney can assist in guiding them through the complex process of Medi-Cal eligibility. This process can include careful transfer of assets , establishments of special needs trusts, and even potentially court action. It is essential to find a lawyer who works in the county the patient resides in. For example, I specifically handle SF East Bay Medi-Cal matters in Contra Costa County and Alameda County.
An attorney can also ensure Medi-Cal will not recover costs from the Estate after the death of the patient.
Each year a bill is presented in California to do away with Medi-Cal's Estate Recovery Program. As of today, however, it is still in place. This means that even if a patient qualifies for Medi-Cal, the state of California may recover the costs they paid for on behalf of the patient, when the person dies. I am currently working on a case where Medi-Cal's claim exceeded $100,000. In this particular case I was able to get the state to forgive the claim, but most people are not so lucky.
Mt. Sinai's study sheds light on the significant costs associated with dementia. As the United States' baby boom generation continues to grow, more and more families will have to face the realities of caring for their elderly loved ones. Planning for Alzheimer's or dementia cannot begin too soon. As soon as an early diagnosis is given, consult with an Elder Law attorney to see what steps you need to take to be financially prepared.
Medi-Cal planning can save citizens of the SF East Bay hundreds of thousands of dollars.