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Families are Being Financially Wiped Out by Out-of-Pocket Dementia Care Costs

In the US, around 10% of adults aged 65 and above have dementia and long-term dementia care has proven to be overwhelmingly expensive for patients and families alike. A recent study stated that dementia care fees take up a sizable chunk of one’s income and affect their retirement savings.

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In today’s blog post, we will be going over the overwhelming dementia care costs as well as the impact on income and retirement savings.

What is Dementia?

Dementia is a term that refers to a collection of symptoms that one could experience if they have ailments such as Alzheimer’s disease. Diseases collectively classified as dementia resulted from abnormal brain changes and could cause a decline in thinking skills.

The decline in cognitive abilities is severe enough to impair daily life, independent function, behavior, feelings, and relationships. Risk factors for dementia include age and genetics.

Common symptoms and signs of dementia include short-term memory issues such as misplacing items or punctuality issues.

Income and Retirement: The Impact of the Overwhelming Cost of Long-Term Dementia Care

According to a study by the Journal of American Medical Directors Association, the cost of long-term dementia care is overwhelmingly expensive and can result in patients and families facing out-of-pocket expenses.

Researchers from the Georgia State University School of Public Health, the University of Washington School of Pharmacy, and the University of California at San Francisco examined data from up to 4,500 adults. Of these examined adults, 40% allegedly had dementia, while the remaining 60% don’t

For adults with dementia, the average out-of-pocket residential care cost was USD $3,090 and USD $3,849 for nursing homes. For those without dementia, costs were USD $2,801 for residential care and USD $2,176 for nursing homes.

On average, dementia-affected seniors paid USD $3,090 per month out-of-pocket for residential care and USD $3,489 per month for nursing homes.

The median for dementia-affected adults spent up to a whopping 97% of their monthly income on residential care, while the median for dementia-affected adults in nursing homes spent 83% of their income on dementia care.

Aside from taking up a sizable chunk of one’s income, whether or not they are seeking residential care or nursing home care, the overwhelming cost of dementia care has also rapidly depleted their retirement savings. This results in difficult financial decisions for the patient and their family.

Dementia Patients Hiring Helpers

Regardless of whether they’re at their personal homes or nursing homes, over three-quarters of dementia patients have hired helpers to assist with daily activities such as dressing and bathing, along with other chores and errands as needed.

Furthermore, up to 56% of dementia patients in the study paid an average of USD $1,000 to helpers each month.

Comments from the Study’s Authors

According to the study’s authors, the analyzed data highlights the financial burden on older adults and families to pay for long-term care, particularly patients living with dementia, who make up a disproportionate share of long-term care patients.

The authors also stated that continued patient or family reliance to fund dementia care exacerbates inequity in healthcare service accessibility.

According to senior author and GSU School of Public Health’s associate professor, Jalayne Arias, “Because dementia is such an expensive illness, it’s really in a category of its own when we start to think about funding for long-term care”.

She also added, “Our study shows that if you compare people with dementia to their age-matched counterparts, they experience costs that are untenable to manage”.

Lead author and assistant professor of health economics at the University of Washington School of Pharmacy, Jing Li, stated that the study greatly emphasized the financial toll dementia care expenses took on individuals and their families.

She was also surprised to see how the median individual with dementia is “basically putting nearly all of their income toward long-term care”. She also added that, while this was anecdotally known, getting confirmation from the data was nothing short of concerning.

Regarding the reduction of the financial burden of long-term care on dementia patients, the authors stated that increasing funding for home and community-based dementia care is a “promising” way to lessen the financial burden long-term dementia care places on patients.


In conclusion, regardless of whether dementia patients are seeking residential care or nursing home care, there’s no denying that dementia care costs will always be a huge financial burden. This can be seen in such expenses taking up a sizable chunk of one’s budget as well as retirement savings.

Because dementia care expenses in the US can be overwhelmingly expensive, enough to impact your savings, that is where we come in.

Known as a leading international health insurance broker, Pacific Prime has over 20 years of experience matching both expats and locals to a health insurance plan that matches both their comfortable budget and their unique healthcare needs.

Whether you’re an expat living overseas or you’re a local citizen yourself, we are more than happy to help you. And should you have any further questions, please don’t hesitate to get in touch with us.

Content Writer at Pacific Prime
Wish Sutthatothon (Nickname: Guy) is currently a content writer at Pacific Prime Thailand, an insurance broker that connects individuals and businesses with insurance providers worldwide. He creates and edits blog articles, guides, reports, webpages, and other types of digital content.

He graduated with a Bachelor’s Degree in Communication Arts, Media & Communication major (concentration: Creative Content) from Mahidol University International College (MUIC). During the compulsory major elective period in the summer of 2021 and voluntarily during the summer of 2022, he also interned as a video and photo editor at Mbrella Films.

He has experience working as an English Content Writer at a real estate buying/renting/selling platform in Thonglor. There, he crafted company blog posts on a multitude of topics. Topics include market trends, legal issues and disputes in property businesses, financial guides, expat guides, home insurance, home decoration and maintenance, and weekly real estate news quick-recaps. Occasionally, as part of the blog-writing process, he would also translate existing Thai blogs to English.

In his free time, Guy enjoys doing scriptwriting and storytelling for comic strips, watching movies, and listening to music (particularly film scores).