The annual cost of a nursing home for a person with dementia averages $42,000 and can easily exceed $70,000 in many places. Changes in the marketplace, with more reliance on community options, may help control costs.
However, relatively few families will be able to pay for all of the care that is needed without impoverishing themselves or raiding savings for their children and grandchildren. Once a person has Alzheimer's disease, it is too late for them to buy long-term care insurance.
Most Alzheimer families will have to exhaust their resources to become eligible for Medicaid. Preserving the long-term care safety net that Medicaid provides is essential. However, it is not the sole solution to meeting long-term care needs.
Recent changes in tax law clarify the deductibility of long-term care expenses and help families who pay for care out of pocket or who purchase long-term care insurance. In addition, some argue for more tax incentives, for private long-term care insurance. These tax incentives help families plan for future long-term care needs and help individuals protect their assets.
If Congress is to provide such tax expenditures for long-term care, it must first assure market stability and consumer protections, so that people who purchase these policies will have the protection they paid for when they need it.
The Alzheimer's Association proposes a set of modest policies that can be enacted now to support and sustain family caregivers, maintain and improve the existing safety net and develop more shared responsibility for long-term care.