Financial Planning for May 2012

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The Costs of an Epidemic: Financial Planning for Alzheimer's Disease

According to the “2012 Alzheimer’s Disease Facts and Figures,” 13 percent of older Americans are afflicted with Alzheimer’s disease. Alzheimer’s ranks number six in causes of death, and more than 15 million Americans (unpaid) care for someone with the disease. By 2050, there will be an estimated 16 million people in the United States with Alzheimer’s. A majority of sufferers are undiagnosed.

Alzheimer’s disease is an incurable, progressive, and ultimately fatal brain disease, the cause of which is unknown. Alzheimer’s is a type of dementia that comes in two forms: early-onset (a rare form that can strike people in their 40s and 50s); and late-onset, which is most common and usually occurs after age 60. Most sufferers are 65 or older, with the risk increasing each year past 65. Women are more likely than men to get Alzheimer’s.

Doctors can’t predict who will get Alzheimer’s disease. A diagnosis can only be made after symptoms have started.

Early symptoms of Alzheimer’s disease might include:

  • Debilitating memory loss
  • Losing items and losing direction
  • Confusion and inability to focus on everyday tasks
  • Personality changes and introversion
  • Trouble speaking or finding words

As the disease progresses, patients lose the ability to communicate, take care of themselves, or recognize family. Advanced stages require constant care.

You probably know or will know someone who has been diagnosed with Alzheimer’s disease. It might be a parent or a friend. If it is a close family member, you could become a caregiver.

The Earlier, The Better

Because Alzheimer’s can steal your loved one’s ability to plan for the future, count money, calculate figures, remember to pay bills, and other financial-related tasks, getting diagnosed early is essential in order to manage the disease and plan for its financial impact.

The first step after diagnosis is to discuss with a doctor what to expect in terms of the disease progression. Understand that your loved one might soon lose the ability to balance checkbooks, pay for items at the store, pay bills, and even count change.

Have a discussion with your loved one about planning for associated costs and other financial issues, such as wills and estate planning. This early discussion is important. At this point, your loved one will probably still have the cognizance to make clear decisions. These decisions may include legally turning over their finances to someone they trust through a durable power of attorney.

Not only is this early decision-making important in financial terms, but it is also important for giving your loved one a stake in his or her own future. This might soothe them emotionally, and it could avoid court after they lose the ability to make rational decisions. Early financial planning protects the finances of both the patient and the caregiver. Failing to plan can be financially catastrophic and emotionally exhausting.

An Expensive Prognosis

Caring for an Alzheimer’s patient is expensive. Total payments annually in the United States for dementia care are $200 billion. Although insurance and government-subsidized options are available, many patients and caregivers must tap into their personal funds. No matter where the money comes from, financial planning for Alzheimer’s disease is essential.

The following are some general guidelines for dealing with an Alzheimer’s diagnosis. It is not exhaustive, and you should talk to a financial planner, tax professional, attorney, or another expert before making significant financial decisions.

Get Organized

Locate and collect important financial documents: bank statements, wills, stock certificates, utility bills, insurance policies, pension, and retirement account statements, deeds and loan papers, and all other financial paperwork. The more of this work you do yourself, the less it will cost when you consult with an attorney or other professional.

Calculate the Costs

No one can predict precisely how much they cost or how long the care might be for Alzheimer’s patients. You will need to prepare for long-term treatment and care based on the advice of a physician. Costs could include prescription medicines, legal and financial planning assistance, home healthcare or hospice services, nursing home or assisted living care expenses, doctor visits and treatments, final expenses, and other costs.

Paying For Care

If the patient has insurance, research the policy or policies to understand the benefits for long-term care and/or progressive diseases. Check for employer-sponsored or individual long- and short-term disability plans. Contact the insurance company or human resources department for coverage details.

Alzheimer’s patients 65 and older can qualify for Medicare, which might be supplemented with Medigap insurance to help fill coverage gaps. Although Medicare doesn’t cover nursing home care, it may cover hospital stays, prescription drugs, rehab, and other costs.

Low-income, low-asset patients with no insurance might qualify for Medicaid, which can help with long-term care costs depending on qualifying factors.

Other ways to help cover costs include:

  • Social Security Disability Income (SSDI)
  • Supplemental Security Income (SSI)
  • Life insurance viatical loans
  • Retirement account withdrawals
  • Local programs and community support

Nobody plans to get Alzheimer’s disease, but financial planning is essential upon diagnosis of the disease, which has reached epidemic status worldwide. Keys to coping are early diagnosis and prompt financial management to help deal with the long-term costs and emotional and financial stress of a progressive, debilitating illness and the eventual loss of a loved one.

Given the statistics, it is wise to have a sound financial plan in place well before an Alzheimer’s disease diagnosis. This will ensure the best care, the least stress, and the lowest possible out-of-pocket expense. Schedule a consultation with a financial planner or other expert today to discuss your options.


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