Often, getting older represents new opportunities, such as enjoying retirement and spending time with grandchildren.
But aging also means individuals are at a higher risk for health-related struggles, such as Alzheimer’s disease.
Alzheimer’s Disease International predicts that 44 million individuals worldwide have Alzheimer’s or a similar form of dementia, and 25% of those living with it never receive a diagnosis.
Hearing that a loved one has Alzheimer’s can come with an initial shock as patients and their families try to accept the diagnosis and put a plan in place for ongoing healthcare and needs. It’s no secret that caring for an Alzheimer’s patient is tough physically, emotionally, and financially.
While the patient may not need one-on-one care yet, the day will arrive when it is necessary. Healthcare, including assisted living, memory care, and in-home care is expensive. It’s prudent to plan now for later needs in preparation. In addition to healthcare costs, it’s also important to consider other financial commitments, including paying bills, tax preparation, and retirement investments.
Alzheimer’s and insurance
Health insurance is an essential part of managing the ongoing expenses of living with Alzheimer’s. Since the disease is progressive, those diagnosed live an average of three to 11 years after diagnosis.
1] Review existing policies.
Insurance companies offer different types of coverage depending on the policy type and company. It's important that families review their current insurance policies to determine their level of coverage and how much they will be required to pay out-of-pocket.
Specifically look to see if there is existing coverage for long-term care, hospital care, doctors’ fees, prescriptions and home health care. If any of these are excluded from the policy, look to alternative methods that could help. If the patient has retirement plans, permanent life insurance, or a health savings account, they may be able to draw funds from these revenue sources for healthcare needs instead. However, some may result in penalties or tax liability, so it is best to talk to a professional financial advisor to discuss options first.
2] Keep policies in place.
In the past, most insurance carriers didn’t offer coverage to people with certain illnesses, including Alzheimer’s. The Patient Protection and Affordable Care Act does offer some protections for individuals diagnosed with early onset Alzheimer’s. These individuals can now access government subsidies to help them purchase health insurance. The Affordable Care Act also prohibits pre-existing condition exclusions and cancellation because the policyholder is considered high-cost.
As health insurance rates continue to rise, especially for Americans 64 and older, who pay an average 2.7 times more than a healthy 21-year old, it can be tempting to cancel the coverage and look for a cheaper alternative. It is vital to avoid canceling existing health insurance policies without researching other options first. Depending on the patient’s age, doing so could cost them the ability to get insurance or force them to pay higher premiums.
Also, it could be useful to put health insurance -- and other bills -- on auto-pay to avoid missing a payment.
3] Long-term care insurance.
Long-term care insurance is a way to protect yourself and your family financially when the day arrives in which long-term care is necessary. It pays the cost of living in a nursing home or assisted living facility. Since the average cost of nursing home care is $7,148 per month, it is beneficial to have a policy in place before being diagnosed with an illness. Once diagnosed with Alzheimer’s, an individual is no longer eligible for long-term care insurance.
Other considerations for family members
In addition to verifying and reviewing insurance coverage, there are some additional items that every family should take care of in the early stages of a diagnosis.
4] Advance directives.
Advance directives are a way in which patients can voice how they want their healthcare and decisions handled before they are no longer capable of making decisions for themselves. Everybody should have a living will that outlines their wishes for medical treatment, a designated power of attorney that can make the decisions, and a do not resuscitate order if they wish.
5] Estate planning.
In addition to advance directives, individuals should also review their estate planning documents with an attorney to establish that there is a will, power of attorney for financial decisions, and a living trust in place to determine what happens to property after death.
Regardless of whether you or your family are impacted by Alzheimer’s disease, it is a good idea to have a plan on how to financially and logistically manage a health crisis.
Maxime Rieman is Product Manager at ValuePenguin. Educating and assisting shoppers about financial products has been Rieman's focus, which led her to joining ValuePenguin, a consumer research and advice company based in New York. Previously, she was product marketing director at CoverWallet and launched the personal insurance team at NerdWallet.
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