Patricia McCormack could barely understand her mother's sobbing voice on the phone. It was 5 a.m., and Helen, then 83, was frantic. "I don't know where I am," her mother said. "I'm all alone. Where is everyone?"
Within days, McCormack, now 65, and her daughter were on a plane to Buffalo, N.Y. What they thought would be a quick trip turned into a life-changing ordeal. Daughter sold her home on the West Coast and daughter and granddaughter spent 2 1/2 years and a good portion of both their savings trying to provide the most appropriate medical care for Helen.
McCormack quickly learned a harsh lesson about caring for someone with Alzheimer's disease: It's expensive, and much of the cost comes out of the family's pocket. Medicare didn't cover the $108,000-a-year cost of the locked memory-care facility that doctors told McCormack her mother needed to ensure her safety right after the diagnosis. And it didn't cover the $84,000-a-year assisted living facility that Helen lived in for three years after that.
So where did the money come from? Helen, a widow and retired hairdresser, was not a wealthy woman. The $60,000 she had in the bank was gone within two years, leaving McCormack with no choice but to sign a home equity loan on her mother's property, currently on the market for a mere $75,000, to pay for the long-term care. Helen only qualified for Medicaid once her assets were depleted and she required nursing home care. By then, McCormack had spent $40,000 — more than half of her savings — on her move to Buffalo and her mother's care.
Two years ago, McCormack and her daughter moved back to California. McCormack, disabled 10 years ago after a bout with hepatitis C, now lives on earnings of less than $3,000 a month from Social Security and a pension. She's left with only $30,000 in savings and relies on financial assistance from her daughter to pay the rent.
"My mother's house is vacant, but we can't sell it," says McCormack who co-owns the house with her mother and brother. "We just got a tax bill for $1,778. We're going to have to heat it over the winter. And we have an equity loan on the house for $50,000, which I'm going to have to pay out of my savings because there's just no more money."
The financial strain of caregiving
McCormack's story is a common one. She is among the 56 percent of caregivers who say Alzheimer's disease has strained their family's finances, according to new findings. The Shriver Report: A Woman's Nation Takes on Alzheimer's interviewed caregivers of people with Alzheimer's or other forms of dementia and found the average cost of care for an Alzheimer's patient is $56,800 per year. Sixty percent of that average cost — $34,500 per year — is covered by caregivers and the rest of the family themselves. The bulk of this is in the form of uncompensated care, but the out-of-pocket costs to the family add up — an average of $7,259 per year.
The family of a patient living independently or with an informal caregiver pays about $850 a year in related costs. But once that loved one is moved to a health care facility, the families' costs skyrocket to $20,535 per year, according to the Shriver Report. This money goes toward adult day care, nursing home, assisted living and paid caregivers such as companions and home health aides. And that care can go on for years — one-third of caregivers have been in their role for more than five years, says the report.
The bulk of that average $34,500 cost — $27,200 — is uncompensated caregiving that helps 70 percent of dementia patients live in the community, rather than in a costly nursing home or assisted living facility. Family members are helping with bathing, feeding and housekeeping, and half of all caregivers have invited a loved one to come and live with them. The remaining 20 percent of patients living in the community are living with a spouse, independently or in another arrangement.
The health of the caregiver
Also included in that amount is the increased price caregivers pay for their own health care. On average, caregivers spend 8 percent more on health care than non-caregivers — about $800 more per year, says Brent Fulton, an economist at the University of California, Berkeley, and a coauthor of the Shriver Report. The health effects of stress could be to blame. Half of all female caregivers report emotional and physical stress related to responsibilities to their loved ones with Alzheimer's, and two out of three female caregivers say they are scared that they, too, will someday develop dementia, according to the Shriver Report.
Seeing Alzheimer's up close — both the disease and its effect on loved ones — has left McCormack with a fear of the disease so strong that she knows what she'll do if she ever exhibits symptoms. "I'm hoarding my [pain] pills," McCormack says. "And if I ever think I'm getting Alzheimer's, I'm taking them. That's how serious it is. I would never put my daughter through this. Never. It has been the worst experience of my life."
Alzheimer's sticker shock
The cost of caring for someone with Alzheimer's disease hits caregivers like an aftershock. Most caregivers are unprepared for the financial realities of long-term care, according to a recent AARP study, "Planning for Long-Term Care: A Survey of Midlife and Older Women." More than half of women haven't planned for their long-term care needs, and 40 percent don't know what long-term care entails. And only one in four women is aware that Medicare does not cover these services. So the diagnosis is bad enough, but then they have to start at square one to figure out how to provide care in the case of a disease whose effects worsen steadily over time.
In the beginning, medication is the only treatment required, and that's usually covered by Medicare Part D or supplemental insurance. But as Alzheimer's worsens, the problems often aren't medical. When mom can no longer bathe herself, or dad starts wandering at night, there's no prescription to write or test to perform — and therefore no Medicare coverage.
"Medicare basically provides funding for health care," says John Bowblis, Ph.D., an economics professor specializing in health care policy at the Farmer School of Business at Miami University in Ohio. "If you think about dementia care, dementia is not health care. It's dealing with activities of daily living: bathing, clothing. And at this point you basically only have two options. One is to go with informal care, where a family member takes care of the person. Or, using your own private funds, you hire someone to also watch the person with dementia."
This reality shocks many caregivers and patients alike. As well as this: Home health aides cost an average of $21 an hour, and assisted living facilities charge on average $38,000 a year, according to the MetLife Mature Market Institute. Neither cost is routinely covered by Medicare as long-term care.
"I think so many people think about how much money they're going to accumulate when they're working, and then how do they spread it out," says Sandra Timmermann, director of the MetLife Mature Market Institute. "They often forget about the risk involved of health care costs, in particular long-term care costs."
Many Alzheimer's patients would benefit from the assisted living model, where they live independently in an apartment community and get assistance with meals, housekeeping and some personal care. But it's largely a private-pay industry, says R. Tamara Konetzka, an expert on aging and health policy at the University of Chicago. "It's a great option for people who can afford it. But there is a large segment of the population that needs that level of care that can't afford private assisted living. And so there is this big hole."
Medicaid will cover nursing home care, adult day care and, in a few cases, assisted living, says Bowblis. But that's only once the patient's assets amount to $2,000 or less (the home is generally not included if the spouse or other relatives live there). So by the time an Alzheimer's patient receives assistance with care, his or her assets have been depleted, and in many cases caregivers, too, are feeling the financial pinch.
Toward a solution
"Long-term care is arguably the largest unfunded health-related need we have in this country," says Konetzka. "There's just no universal way to fund this. And so we end up with a patchwork that varies from state to state."
But moves to alleviate this problem are in the works.
The Community Living Assistance Services and Supports (CLASS) Act, passed as part of health care reform, would set up a long-term insurance program funded by premiums voluntarily deducted from worker's paychecks. The program would cover a variety of services meant to keep people living independently, from in-home help with activities of daily living to respite care for caregivers. But that program won't start until October 2013.
Long-term care insurance, available for purchase on the open market, could help bridge the gap for the growing numbers of families that will be coping with an Alzheimer's diagnosis, as the number of people over age 65 affected by Alzheimer's is expected to reach up to 16 million by 2050. However, only 7 million Americans now opt for long-term care coverage, according to the Shriver Report.
One of the problems with long-term insurance is that to qualify for coverage, you need to apply long before you need it, says Timmermann. "Obviously you can look to long-term care insurance, but the person who purchases it has to be in good health to pass underwriting," she says.
Another idea often brought up, Konetzka says, is compensating informal caregivers for at least some of the $150 billion in uncompensated assistance provided annually to Alzheimer's patients. Caring for people with early stages of dementia in the community costs less than providing them institutionalized care, such as in assisted living. So in theory, providing the support to keep people in the community longer would save Medicaid money in the long run.
"We rely on informal caregivers to hold these costs down," says Konetzka. "And people prefer to be taken care of by a loved one. So there is a lot more we could be doing to support them."
Payments would theoretically help ease the burden on the 20 percent of caregivers who had to take a leave of absence from their jobs to attend to their loved ones, the 10 percent who lost job benefits, and the 8 percent who chose early retirement because of their responsibilities, according to the Shriver Report.
Other ideas include giving caregivers more support services, such as easier access to adult day care so they can remain in the workforce longer.
"We assume that it's better to be taken care of by informal caregivers, but they often don't have the training they need to know what they are supposed to do in certain situations," Konetzka says. "And then there are things like respite care so that caregivers can have a few days off if they are reaching the end of their capacity and need a break."
Unfortunately, none of these solutions will help McCormack, who is dealing with the challenges of her own age and health status as well. Her mother, now 91, is living in a nursing home in Buffalo. The severe weather forced McCormack, who has had four knee-replacement surgeries, to move back to California for her own health. It's been months since she's seen her mother, and until her mother's house sells there will be no money for her to fly out to visit.
And while the financial cost has been substantial, it's the emotional cost that has been Alzheimer's true toll on McCormack.
"She's alone," McCormack says. "She's halfway around the country. I grieve for my mother who is still alive."
Cynthia Ramnarace, from Rockaway Beach, N.Y., writes about health and families.