According to the Alzheimer’s Association, 5 million Americans have the disease. Of the 15 million other Americans who take care of them, 85% of those are friends and family members, many of whom, like Judy, have forfeited employment to provide full-time, unpaid care to their loved one.
A dizzying constellation of family photos and memorabilia bursts forth from the walls of the Johanson family’s kitchen. This is the center of the universe for Judy Johanson, age 53, and her husband Steve, age 62, and the four generations of their family, all of whom live in four contiguous homes built by Steve and his brother at the end of a quiet, tidy working class street in Watertown, Mass.
A cheerful domestic symphony resounds: There is Ruby the Tibetan terrier puppy’s yips and clickety paws as she skitters across the wood floor with Johanson grandsons Nathan, age 5, and Caleb, age 7, in pursuit; the voices of various other family members entering and exiting, updating one another on the day’s itinerary; Judy grinding beans for coffee; and Steve, whistling to himself, as he so often does.
It’s a scene both typical, and atypical, for families touched by Alzheimer’s in America.
“Sometimes, I feel like we’re not despairing enough,” Judy laughs when referring to how her supportive and tight-knit family, which includes her parents, sister, daughter, son-in-law, and two grandsons, might be perceived despite Steve’s early diagnosis with the disease. “But there are times when I feel a deep, deep sorrow.”
The Johansons’ experience with Alzheimer’s is typical in that, as the spouse of the afflicted person, Judy is the one taking care of Steve, and at a substantial price.
According to the Alzheimer’s Association, 5 million Americans have the disease, which is twice as common in women than in men. Of the 15 million Americans who take care of them, 85% are friends and family members – many of whom, like Judy, have forfeited employment to provide full-time, unpaid care to their loved one.
In 2014, dementias such as Alzheimer’s were responsible for 17.9 billion hours of informal, unpaid care. That care is worth nearly $218 billion – a figure that the Alzheimer’s Association points out is equal to almost half of Walmart’s net sales total in 2013.
Meanwhile, as the first of the baby boom generation turns 70 in 2016, the Lewin Group, a policy and research consulting firm, reports that the prevalence of Alzheimer’s in baby boomers will increase from 1.2% in 2020 to more than 50% by the year 2050, when the youngest of the surviving baby boomers will be at least 85. By 2040, the Lewin researchers predict the 4.7 million Americans with Alzheimer’s in 2015 will mushroom to 10.3 million. Aging along with this population are the ones who likely will care for them.
“That’s my biggest fear,” says Judy. “What if something happens to me?” Ultimately, though, as Steve’s primary caretaker, Judy says she can’t afford the “luxury” of worrying about that now. “I have too much to do.”
Aging population, growing costs
In 2013, Michael Hurd, Ph.D., senior principal researcher at the RAND Center for the Study of Aging, and his colleagues published data showing that, depending upon the method used to value informal (that is, at-home) care, the annual cost in 2010 of caring for a person with Alzheimer’s who is 70 years or older ranged from approximately $42,000 to just over $56,000.
With what Dr. Hurd estimated was a prevalence rate of about 15% of the U.S. population older than 70 years in 2010 being diagnosed with Alzheimer’s disease, this equals a total annual cost of care between $157 billion and $215 billion, $109 billion of which is for care delivered by health professionals.
Only $11 billion of these costs were covered by Medicare, an important fact to note, says Marc A. Cohen, Ph.D., chief research and development officer at LifePlans, a Boston area–based risk management consulting firm.
“There is a lot of misperception about public coverage. People think if they need long-term care, Medicare will pay,” says Dr. Cohen. “That’s not true.”
The Lewin Group predicts that Medicare spending on Alzheimer’s will be nearly a quarter of the entire Medicare budget by the year 2040 when the entire baby boom generation will be between the ages of 76 and 94 years. However, Medicare only covers the cost of skilled, acute care – and that is only if the person has been hospitalized for a minimum of 3 days before needing additional services. If the patient requires services beyond 21 days, there is a substantial copay.
It’s a problem Dr. Cohen says could and should be met with a better public awareness campaign to let people know what “is and isn’t covered by public services, and to encourage them to avail themselves of private solutions.”
Little interest in LTC insurance
Purchasing long-term care insurance during one’s 40s or 50s is one way to prepare for the cost of dementia care, but Dr. Cohen says that most people have difficulty seeing their future selves as being incapacitated in any way. According to Dr. Cohen, only about 8 million Americans have purchased a long-term care insurance policy, which he says costs, on average, about $2,300 annually.
Although Steve’s early diagnosis at age 58 was atypical (most persons with Alzheimer’s are diagnosed after age 65), the Johansons were like most Americans in that at the time they learned Steve was ill, they did not carry long-term care insurance and are now ineligible to purchase it for him.
Even if they’d had such a policy, Judy says they would not want to use it. “It’s hard to think of that other kind of future when we can still very much take care of him now,” she says about putting her husband in an assisted living facility. While Judy acknowledges the day will come when Steve will need full-time care, she says, “my hopes are that Steve’ll be able to stay home, and we can care for him here.”
Dr. Cohen says that long-term care insurance would have helped Judy achieve that goal. “Long-term insurance gives you a pool of money to pay for care in multiple settings, including not just assisted living [facilities], but also respite care such as an in-home health worker or adult day care.”
At present, there is no cure for Alzheimer’s, nor is there an intervention known to slow the disease to any significant extent, much less a breakthrough drug that is anywhere close to approval.
Recently published data from the United Kingdom indicate lower age-specific rates of occurrence of the disease, meaning Dr. Hurd’s modeling might actually be too high. Whether these data are applicable to Americans, and if so, whether rising rates of cardiovascular disease and type 2 diabetes – both risk factors for Alzheimer’s – could cancel any gains made from a decline in age-specific rates, are unknown. “Either way, we currently are unprepared to pay for the amount of necessary care,” Dr. Hurd said.
Should the United States mandate people buy long-term care insurance, similar to how Americans are now compelled by law to carry health insurance? Dr. Cohen believes that is unlikely.
During the time the Affordable Care Act was being vetted in Congress, a proposal for a national, long-term care policy was put forth. The CLASS Act (Community Living Assistance Services and Support Act) would have made coverage available, similar to how health insurance can now be purchased in state-sponsored marketplaces.
But, according to Dr. Hurd, the scheme was “doomed” from the start because of ineffective risk pooling: People could sign up for it even if they were already experiencing cognitive decline. Meanwhile, because purchasing this coverage was not actually mandatory, the fear was that too few people would purchase the policies, leading to adverse selection. “The actuaries said it would break the bank, so they said not to do it,” Dr. Hurd said.
Financial peril for middle-class families
A partial solution, according to Dr. Cohen, is to reconsider how society cares for the elderly overall, particularly because increased longevity is straining public safety nets.
“Medicaid was designed to be a program for the poor initially, but now it has become the largest payer of long-term care,” he said. Now, in the absence of policies that encourage people to become insured either through private or public programs, Dr. Cohen said there will continue to be increased pressure on states to either increase taxes or cut back other entitlements in order to expand Medicaid coverage for long-term care.
For the private long-term care insurance market to succeed, Dr. Cohen said, “unless there is a strong public sector role, it’s going to be difficult. One could imagine that the public sector will say they will provide public insurance for anyone who has a need greater than x years of care, then the private sector fills in the gap.”
The impetus for this, says Dr. Hurd will be when “people start to see the implications, and realize we can’t leave individual households exposed to spending that would consume half or two-thirds of their retirement resources.”
Until that time, he warns, “individual households are subject to several hundreds of thousands of dollars in risk. For most people, that breaks the bank in their retirement years.”
For the Johansons, this is a discrete possibility. Judy, now in charge of the finances her husband once handled, said that she relies on their retirement money to close the gaps left by the loss of each of their former full-time incomes: She shuttered her in-home day care business in order to care for Steve. Steve’s former employer is paying him 60% of what he once earned annually, as well as 50% of the Johansons’ total health care costs – although this will discontinue soon when Steve turns 65.
Because they are middle-income Americans, the Johansons do not qualify for Medicaid.
“People who were always poor will be on Medicaid and stay on Medicaid. It’s a very valuable safety net,” Dr. Hurd said. But he paints a very different picture for families with modest means who, in order to qualify for long-term coverage under Medicaid, must divest themselves of any assets other than what can be used to cover the cost of assisted living. This often means that the spouse is left “impoverished,” according to Dr. Hurd.
For now, having to place Steve in an assisted-care home is unbearable not just financially, but emotionally.
Judy recounted a recent outing with friends of hers she’d not seen for a while, all of them women from an Alzheimer’s disease support group. When she asked about their respective spouses, she said she was left with a pit in her stomach that made her sick for days: All of the husbands were either dead from the disease or in a long-term care facility.
“I guess in my naive view, part of me thinks that a lot of why people have to place their spouse in an [assisted facility] is because their [spouse’s] levels of anxiety and aggressiveness get too high to be managed at home. But all directions point to how Steve may never get to that agitated state, because it’s not in his nature.”
If that’s the case, she said, with the moral support she receives from her family and advocacy groups such as the Alzheimer’s Association, she not only can handle anything else her husband needs, she is retarding the disease’s ability to harm him.
“If I continued to work, Steve could not be left alone,” Judy explained. “But, when Steve has to leave the house, it’s like his disease accelerates times ten. It’s so stressful for him.” By staying home with him and ensuring his day goes smoothly, she said she is keeping him at “baseline.”
“It’s not the right thing for everybody, but we have our supportive compound here,” she noted. “By building these homes for our family, that was Steve investing in long-term care.”