News & Commentary

Dementia's true costs not a problem for insurers (yet)


That dementia puts more—much more—of a financial strain on families and loved ones than either cancer or heart disease may not surprise people who have cared for elderly people with major cognitive deficits. But systematically putting some numbers to the difference brings the money issue into focus, and a study published in the Annals of Internal Medicine did just that.

Between 2005 and 2010, the average total cost of care in the five years prior to death for older Americans who died from dementia was $287,038, compared with $175,136 for those who died from heart disease and $173,383 for those who died from cancer, according to a study in the October 26 issue of the Annals.

Adjusted* end-of-life spending for dementia and nondementia groups

*Estimates of total spending for dementia and nondementia groups, adjusted for age, sex, race, education, marital status, and coexisting conditions.

Source: Kelley AS et al., Annals of Internal Medicine, Nov. 17, 2015

The relative differences in out-of-pocket spending were even greater. For dementia, the outlay was $61,522. For people with conditions other than dementia, it was $34,068.

There’s no mystery about the reasons for the high out-of-pocket expenses associated with dementia. Medicare doesn’t cover the care that people with dementia often need: nonrehabilitative nursing or home health care. More than half of all patients with dementia wind up spending down their assets to levels that make them eligible for Medicaid.

Amy S. Kelley, MD, the lead author, tells Managed Care that “making the case for why the Medicare Advantage plans specifically should care is tough because many of these costs are currently outside Medicare’s realm of responsibility.” She notes that the extent to which the burden of caregiving affects the health of the family may be a hook for some insurers who provide policies to spouses as well.

As more people are affected by dementia, public sentiment and public policy may shift, observes Kelley, leading to more governmental protection of families that would otherwise be impoverished by a family member’s dementia.

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