What are the chances of developing cognitive impairment or full-blown dementia in old age?
If you think it's “slim or nothing,” try again.
If you are over 50, your lifetime chance can be as high as 67%. Surprisingly, a team of experts reported a few years ago in the peer-reviewed academic journal SSM Public Health. The average age of those who developed cognitive impairment was 70 years old for men and 73 years old for women. The average age of people who developed full dementia was 79 years for men and 83 years for women.
Much lower and more cautious scientific estimates, based on smaller, older and more recent samples, still suggest that about 32% of people over 65 have dementia or mild cognitive impairment. It turns out. It was published in the American Medical Association Journal of Neurology.
But even if we take these low numbers as benchmarks, they still represent an incredibly high risk. And the risk increases rapidly as you get older. Approximately half of people in their late 80s have dementia or cognitive impairment. And half of them, or 25% of the population, have full-blown dementia.
All this is the alarming context of a new report published in the Journal of the American Association of Medical Directors about the “catastrophic” financial risks people face in old age if they develop dementia. By the way, these are the author's words, not mine. “People with dementia were at higher risk of facing catastrophic out-of-pocket costs for long-term care than people without dementia,” they wrote.
Researchers found that the median elderly person with dementia living in a nursing home or assisted living facility spends between four-fifths and 100% of their monthly income on long-term care. But a quarter of that time he spent “nearly 300% of his monthly income on care costs.”
You don't need to be a financial genius to understand that spending 300% of your monthly income on long-term care is not sustainable. The way it works is that you spend almost all of your assets and then throw yourself at the mercy of Medicaid.
Good news? For people who are aging, these numbers are lower. Researchers say the average person living at home spends an average of $1,260 a month, or $15,000 a year, on care. The numbers are still improving for most people, said Jing Li, the report's lead author and assistant professor of health economics at the University of Washington, in an email to MarketWatch.
This $1,260 is the average monthly expense for a small number of people living at home with dementia. and They are paying out of pocket for the assistance, he told me. And that's less than 10% of people living at home with dementia, he added.
According to him, just over 40% of dementia patients in nursing homes pay for their care out of pocket. He said their average cost is about $3,900.
“Our findings suggest that it may be cheaper to age in place (especially for people with dementia) because the out-of-pocket costs of long-term care are much lower than for people in nursing homes. “I'm suggesting that,” he told me.
But that too has its problems.
Many older adults are cared for part-time or full-time by a family member (often a spouse, but sometimes an adult child, another relative, or a friend). Unless the hands of money change, that burden will not show up in traditional economic data. But it's not “free”. It is often a huge burden and falls on the caregiver.
If you need specialized medical care at home, the cost will be higher, but the savings will be smaller than in a nursing home.
And that causes further problems. What does this mean for unmarried people and those without children? Or is it for people whose children don't want to help, as is often the case?
Furthermore, if a wife is caring for her husband who has dementia, for example, if the husband is gone, there will be no one around to care for the wife if she develops dementia.
A shocking 22% of older Americans have dementia. I live alone now.
Sandra Gilpatrick, a financial planner in Boston, said too few people consider this risk when developing their overall financial plan. She says, “I tell my clients that one of the best financial ways to protect against potential cognitive impairments, such as dementia, is through a long-term care policy.”
She added, “Relying on Medicare is not a good plan. Medicare does not support aging with dementia.”
(Gilpatrick practices what she preaches. She said I happened to email her about this just as she and her husband were applying for long-term care insurance. I said that it is important to apply for insurance when you are middle-aged. Since you are still in good health, you can apply for insurance at a reasonable premium.)
By Jessica Hall — See here and here — Beth Pinsker and Judy Stringer have written extensively for MarketWatch on the challenges of aging.
There is no cure for dementia, but certain new (and expensive) drugs can slow its progression.
On the other hand, the average life expectancy of people with dementia is between 6 and 10 years.
This is bad news economically for everyone, from individuals to Medicaid and Medicare to state governments and, therefore, taxpayers. The federal government has expanded support for home help through programs such as PACE (Program of Comprehensive Care for the Elderly), but currently 99% of beneficiaries receive Medicaid. Meanwhile, states are experimenting with programs, with Washington state creating a mandatory long-term care plan funded by a 0.58% payroll tax. However, the current maximum benefit is $36,500.
Bottom line: Keep saving.
