What Medicare and Medicaid Cover

• Medicare covers up to 100 days of "skilled nursing care" per illness, but there are a number of requirements that must be met before the nursing home stay will be covered. The result of these requirements is that Medicare recipients are often discharged from a nursing home before they are ready.⁶

  Medicare does not cover the costs of long-term stays in nursing homes.⁶

• Medicaid may pay for nursing-home care. In all 50 states and the District of Columbia, Medicaid will pay for nursing-home care for persons who require that level of care and meet the program’s financial eligibility requirements. Be aware that the financial requirements and the level-of-care requirements vary based on the state.

  Furthering the complexity is that the financial requirements change based on the marital status of the Medicaid beneficiary/applicant. For those who are eligible and meet the income and asset limits, Medicaid will pay for the complete cost of nursing-home care, including room and board. Medicaid generally requires a person exhaust most of their assets before it kicks in. Medicaid is a form of welfare—or at least that’s how it began. So to be eligible, you must become “impoverished” under the program’s guidelines.

  Medicaid will cover this cost on an ongoing, long-term basis for however long that level of care is required, even if it is required for the remainder of one’s life.⁷

The Total Lifetime Cost of Dementia

The total lifetime cost of care for someone with dementia is estimated at $392,874 in 2021.⁸

These costs may include:

1. Medical expenses: This includes doctor's visits, hospitalizations, and medication costs.
2. Caregiving costs: Dementia patients often require round-the-clock care, which can be provided either by family members or professional caregivers. This can be a significant expense, particularly if the patient requires skilled nursing care.
3. Home modifications: As the disease progresses, patients may require modifications to their home to make it safer and more accessible. These modifications can include installing handrails, wheelchair ramps, and stairlifts.
4. Lost income: Caregivers may need to reduce their work hours or stop working altogether to care for their loved ones with dementia. This can result in a significant loss of income.
5. Legal and financial fees: As the disease progresses, patients may become unable to manage their own affairs. This can lead to legal and financial issues that require the assistance of an attorney or financial professional.
6. Hospice and end-of-life care: In the later stages of dementia, patients may require hospice or end-of-life care. These services can be expensive and may not be covered by insurance.

From a financial standpoint, obviously, we’d all love to say there are things we can do to eliminate the risk of dementia, Alzheimer’s, and mental decline. While that may not be practical, if we could postpone the age at which it occurs, it would impact this number and, beyond the number, our quality of life. If there’s anything we can do to maintain a healthy brain as long as we can, we should be interested in doing that.

Steps we can take to prepare for the potential costs of cognitive decline for ourselves or a loved one:

1. Start planning early: Even if you don't have a family history of the disease, it's important to start thinking about the potential costs associated with it
2. Consider long-term care insurance: Long-term care insurance can help cover the costs of care if you develop dementia and need assistance with daily living activities
3. Consider setting up a trust: A trust can help protect your assets and ensure that they’re used to pay for your care if you develop dementia. A trust can give you greater control over how your assets are used and protected for you and your loved ones, even if you develop dementia.
4. Consult with a financial professional: A financial professional can help you develop a plan to pay for the costs of dementia. They can also help you explore investment options and create a retirement plan that considers potential costs of dementia.
5. Work with additional professionals: An elder law attorney can help you set up documents that may be needed, such as a durable power of attorney, trusts, a living will, and a durable power of attorney for healthcare. With a durable power of attorney, you can choose a person to make decisions on your behalf if you become unable to manage your finances independently. 
   A life care manager can also help provide valuable guidance on financial planning specific to cognitive decline.
6. Talk with your loved ones: Have open and honest conversations with your loved ones about your plans for dementia. They can provide support and help ensure that your wishes are followed.

If we can do things to keep our brains healthy, we can avoid some of the costs tied to an unhealthy brain. In our next section, “How to Age-Proof Your Brain,” we’ll look at things you can do to potentially reduce the risk of getting dementia or Alzheimer’s disease.