Facilities for the care of those with Alzheimer’s disease or other forms of dementia may be something you’re looking into as a caregiver.
The purpose of care facilities is to keep seniors with cognitive decline safe, active, and well. Care facilities include places like assisted living facililties, memory care facilties, and long term care facilities.
However, the cost of assisted living or care can be daunting for many people. In fact, a recent survey found that the median annual cost of memory care in 2021 was $5,430/month.
The good news is that there are a variety of funding alternatives for memory care facilities to choose from. First, we’ll go over a variety of options for offsetting the expense of treatment, including federal and state programs, benefits for veterans, charitable organizations, loans, and tax credits.
Alzheimer’s And Dementia Financial Aid Options
There are multiple financial aids available for Alzheimer’s and Dementia. See below for some of the options available.
1. Medicare
Alzheimer’s and dementia care are treated in the same respect by Medicare and other health insurance plans. Their plans, by default, also cover more common medical diseases like heart disease.
However, detailing a little further, Medicare has rules about when and how much it will pay for medical services.
If a nursing home stay is medically essential, Medicare may cover the entire cost for the first 20 days and the remaining later. For example, Medicare can cover up to 190 days of care in a psychiatric hospital for a person with Alzheimer’s disease.
Medicare doesn’t cover personal or custodial care for residents in assisted living facilities. However, it will cover the costs of medical services rendered in the area. The same holds true for facilities that provide either adult day care or home care for seniors.
Alzheimer’s patients often need personal care, ADL support, and close supervision, yet these services are not provided. Nevertheless, medical care is paid for.
If a patient is getting hospice care in their home, they are exempt from this rule. Medicare covers personal care and other services for people in their final six months of life.
Patients with Alzheimer’s may not qualify for special coverage under Medigap or Medicare Supplemental Insurance. However, it does provide extra help when needed.
For example, these plans often cover the additional 20% of a nursing home’s costs that Medicare does not cover.
2. Medicaid
Medicaid is a federal-state partnership that provides medical coverage for low-income families. Medicaid is governed on a state-by-state basis. As a result, a wide variety of Alzheimer’s and dementia care services are available across the country.
Waivers from the federal Medicaid program are offered by specific states so that patients can receive treatment in settings other than nursing homes.
In addition, participants in the Medicaid Waiver Program are not required to live in an institution.
They can instead receive Medicaid-funded care in a variety of community settings, including their own homes, those of family members, adult foster care homes, assisted living facilities, and senior citizen communities.
All Medicaid Waivers need participants to have functional impairments besides meeting financial eligibility criteria. Only a small subset of these cases need a clinical diagnosis of Alzheimer’s disease or another kind of dementia.
They focus on a person’s ADL competence to determine whether or not they can provide for their own care. Patients in the middle to late stages of Alzheimer’s disease often meet the functional requirements for Medicaid benefits.
Several states offer special programs for persons with Alzheimer’s, dementia, or a related condition. They don’t include income or assets as the criteria. Only the diagnosis of these conditions is required.
3. Veterans’ Support
Veterans of a certain age may be eligible for financial assistance from The Department of Veterans Affairs (VA) in the form of a number of different benefits.
Health care benefits provided by the VA may include aid for those dealing with dementia or other forms of cognitive impairment. Eligible veterans may get VA support from the time of dementia diagnosis until the latter stages of the disease.
Those who have Alzheimer’s disease or another kind of dementia can apply for one of the VA’s many aid programs.
Veterans and their spouses who have an Alzheimer’s or dementia diagnosis will most likely obtain some form of financial aid for their care through the Veterans’ Administration.
However, it is unrealistic to believe that the VA will pay for all the expenses associated with caring for a loved one with dementia.
Medical treatment is provided under the VA Health Care program, but the non-medical help that so many people with Alzheimer’s or dementia require is not provided.
However, VA pensions like Aid & Attendance provide a financial allowance that can be spent for any kind of care, from basic help to supervision.
Home Improvements and Structural Alterations (HISA) grants may be used to pay for necessary renovations whether or not the dementia is a result of the recipient’s military service.
Approaching your local VA benefits office is a good idea to find out if you qualify for these programs.
4. State Programs
Individuals diagnosed with Alzheimer’s disease or dementia can often access “general fund” support in several states. Some of these services are aimed solely at people with dementia (and hence require a formal diagnosis), while others are more general and cater to everyone in need of care due to advanced age.
The fact that these are not necessarily guaranteed benefits further muddies the eligibility waters. Instead, the initiatives can only aid a finite number of people due to a lack of resources. As a result, many services have waiting lists.
Some state programs prioritize their waiting lists depending on the urgency of an individual’s situation, while others do so based solely on a person’s place in line.
Caretakers of those with Alzheimer’s disease can often receive financial support through state-run programs. These cover respite care costs, such as adult day care or care delivered in the home.
Many states offer some sort of adult daycare service. In addition, care for people with dementia can be provided in the comfort of their own homes thanks to state-funded initiatives in Wisconsin, Vermont, and Oregon.
It may not be easy to track out such courses. However, the Area Agency on Aging is the first point of contact that a person should make.
Other Sources
1. Tax And Deductions
Relevant tax credits and deductions aren’t created for Alzheimer’s or dementia patients. The Elderly or Disabled Tax Credit could save a family thousands per year.
This credit is for individuals or married people filing their own taxes. An adult child may benefit by claiming a parent with dementia as a dependent.
If adult children contribute at least 50% of their parent’s financial assistance, the Child and Dependent Care Credit apply. Many states have their own Dependent Care Credit.
Medical and dental expenditures can also be subtracted, as can some memory care home charges (assisted living). Even stairlifts and wheelchair ramps are tax-deductible.
2. Reverse Mortgages
Reverse mortgages have to be paid back a year after the owner moves out. Since most people with Alzheimer’s will need residential care at some point, the question becomes how long until that time.
A reverse mortgage could be a good option if a person is in the early stages of MCI and won’t need home care for five years.
It comes in handy to get money for occasional help around the house. But a reverse mortgage is an expensive way to get money if you may have to move in the next two years.
This rule doesn’t apply only when the person with Alzheimer’s has a healthy spouse who will stay in the home after the person with Alzheimer’s moves into a care facility.
3. Life Insurance Conversions
Policyholders have a few options available to help decrease the costs of Alzheimer’s care during the policyholder’s lifetime.
When the policyholder’s life expectancy is short, the first step is to contact the insurance provider to inquire about death benefit loans or accelerated death benefits.
You always have the option of trying to sell the coverage as a backup plan. The purchasers will make a one-time payment, then take over the policy’s monthly payments and collect the policy’s death benefit upon the policyholder’s death.
Lastly, you can inquire about trading in your policy for caregiving services, which may be the best use of your life insurance.
A policy’s worth might be translated into a set duration at a residential care facility via an intermediate agency.
4. Caregivers Mortgage
A caregiver mortgage is similar to a reverse mortgage in that a parent might borrow against the value of their property to compensate their adult child for caregiving services rendered.
If done correctly, adult children/caregivers can be reimbursed. Parents can receive the medical attention they need. The family house can be shielded from a Medicaid estate recovery, and inheritance taxes can be kept to a minimum.
Caregiver mortgages come in various forms and can go by many names, such as Family Funded Reverse Mortgages, Caregiver Contracts, and Personal Care Agreements.
Caregiver mortgages are complex financial agreements that need the advice of a professional before they are entered into.
5. Alzheimer’s Care Loans
These loans are helpful for people who need money quickly to cover the cost of senior care. Most families can benefit from them as they wait for extra funding.
Veterans benefits for Alzheimer’s care are one example, although there is a 9-month wait due to the claims backlog. Alternatively, they may be able to afford care but will use the money from a house sale to cover the costs.
6. Annuities
Even though an annuity is commonly obtained through a pension plan, it can be bought independently. This method divides big cash into weekly or monthly payments.
An annuity offers a consistent income stream for the remainder of the policyholder’s life. Alzheimer’s care in an assisted living facility might also be financed this way.
7. Nonprofits And Foundations
There are a variety of charitable organizations that can help with Alzheimer’s care. Some organizations help seniors by connecting them to low- or no-cost services in their area, while others focus on offering financial assistance to cover the costs of care, housing, or medical aid.
Takeaway
To pay for the costs of assisted living, seniors may rely on a combination of personal savings, pensions, and other forms of financial aid.
Seniors and their families should consider all of the options that might be beneficial to them. Talk to a trusted financial counselor and maybe an elder law attorney before making any big moves with your money.
References
- https://www.alz.org/help-support/caregiving/financial-legal-planning/paying-for-care#:~:text=%E2%80%8B%20Call%20800.827.,visit%20www.va.gov.&text=In%20addition%20to%20Medicare%2C%20the,to%20people%20who%20are%20eligible.
- https://www.debt.org/medical/financial-help-alzheimers-dementia/
- https://www.alzheimers.org.uk/get-support/legal-financial/benefits-dementia
- https://www.payingforseniorcare.com/memory-care
- https://acl.gov/programs/support-people-alzheimers-disease/support-people-dementia-including-alzheimers-disease
- https://www.villageswindcrest.com/blog/paying-for-dementia-care/
- https://www.nhs.uk/conditions/dementia/finances/
- https://www.care.com/c/paying-for-alzheimers-dementia-care/
