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The stunning cost of memory care

I looked across the slick expanse of the long, polished conference table. I was waiting for the executive director of the Daylight Assisted Living and Memory Care facility. The room seemed more fitting for a board of directors meeting or a funeral home than a room in which we’d discuss the suitability of placing my husband in Daylight’s care. 

Edie was a small woman who moved without fuss or anxiety. She quietly entered the room and slipped into the captain’s chair at the front of the table near the video display screen, her chest just clearing the table’s edge. She was deliberate, unhurried, and greeted me with kindness. I felt that I could speak candidly with her and that my questions would be answered truthfully in return.

The next step in our journey

I’d begun my search for a placement for Robert after I concluded that I could not care for him at home. He could no longer be left unattended. I could not lift him, or spend all my time and energy meeting his basic needs. I had decided, reluctantly, and with no small measure of guilt, that I was not the best person to care for him through the course of his disease.

Edie presented the slides that had been prepared for people like me, family members of loved ones with dementia. Her presentation highlighted the features of the facility, its staff, and resident activities. Then she began the long enumeration of the expenses for which I’d be responsible if Robert were to become a resident of Daylight. 

Memory care facilities of a certain size and corporate structure, itemize every touch your loved one will receive from staff. Each medication dispensed, each shower supervised, and each meal brought from the dining room to the resident’s room is carefully captured and cited for invoicing. Levels of care are estimated at the outset of placement and may be adjusted after 30 days. They are always adjusted upwards. Needs only ever increase. There will never be any sudden reversal of fortunes after which your spouse or parent is suddenly able to attend to their own needs.

Have I got a deal for you!

They gave me a “deal.” In the spring of 2021, Daylight’s census was low because of COVID-19. Congregate care facilities had been hard hit by the virus. The rent on Robert’s (truly spacious) 20’ by 15’ room would be only $152 per day. He’d have his own bathroom. After all care deliverables were factored in, based on what was understood of his need for assistance, Robert’s placement would cost $324 per day, or $9,720 for a 30-day month. We had never budgeted this much per month for our entire family of four. 

What did I feel? I felt panic. I felt my throat constrict and my face flush. How on earth was I going to pay for this? The average life expectancy for someone with FTD is six to eight years from diagnosis, but it can be as long as 20 years. We were four years in. Robert would live for another two to four years…or maybe another 16. 

It is nearly impossible to avoid the calculus of life expectancy when you’re trying to figure out how long your money will last. We do this in estimating our own retirement needs. Though it seemed morbid, I was applying the same thought process to Robert’s life. The numbers were just much bigger. The tapestry of our planned, rich, and varied retirement life unraveled.

Rolling up the dollars

The national median annual cost for placement in a memory care facility is $65,000 per year. The going rate in my area averages $8,000 a month or $96,000 a year. Placing a loved one in a memory care facility is not covered by health insurance. Memory care facilities operate as for-profit, private-pay businesses. I wish I had better news.

I had explored contracting with a home health aide before settling on the memory care option. (See my story here). Contracting with a home health aide might be affordable if you’re only contracting for 4-8 hours per day.

Hiring your own 24-hour care means going through an agency to cover payroll taxes and insurance or cobbling together a network on your own and dealing with the complexity of this arrangement at a time when you are already overburdened with the details of your loved one’s care. In my area, home health aides start at $25/hour during the daytime and $16 for overnight care, totaling ~$456 per day. Hiring for round-the-clock care would cost more than placement at Daylight. When you need 24/7 care, a home health aide is generally not an affordable option.

But Medicare covers it, right?

Contrary to popular folklore, Medicare does not cover memory care at all. There is no “dementia care safety net” for Americans earning more than poverty-level wages. Social security benefits can be used to offset the monthly cost of care, but social security benefits are never enough to cover the full monthly expense. 

Medicaid (for income-qualified people) offers the only public, paid, long-term care option for people with severe, end-stage dementia. Placement is made in a nursing home, not a memory care facility. To qualify for Medicaid in California (called Medi-Cal), a family of two can earn no more than $26,228/year. For the sake of comparison, the average rent on a one-bedroom apartment in Petaluma, where I live, is $2,302/month or $27,624/year. For a person to qualify for Medicaid, they must be very low-income indeed.

Because the cost of memory care is so high, it is not uncommon for caregivers to retire early to care for their spouse or parent. Very few people can afford the monthly expense to outsource caregiving.

How big is the problem?

In 2020, 15.7 million Americans provided unpaid care to an adult family member with dementia. Let’s do the math. There were 209 million working-age adults in the US. If 15.7 million of them are caring for someone with dementia, that’s 7.5% of working-age adults! (The number climbs to 34.2 million when unpaid care for all types of illness is considered.)

This is not a small problem. 

The cost to families

“Long-term care is one of the biggest expenditure risks that faces the elderly population,” says Stanford economist Gopi Shah Goda. Because services like memory care and long-term home health care aren’t covered by Medicare or other health insurance, she said, “people impoverish themselves paying for long-term care until they’re eligible for Medicaid, which does cover long-term care services.” (The Washington Post, July 1, 2023: The Boomers are retiring. See why that’s bad news for workers. )

As I shared in my story here, a MetLife study estimated that the amount of lost wages and reductions in Social Security and pension benefits totaled $303,880 for the typical caregiver age 50 or older who left the workforce early.

And the impacts are not felt equally by men and women. Upwards of two-thirds of caregivers are women. As unpaid dementia caregivers, their earning years and social security wages are cut short. Women who are full-time caregivers are 2.5 times more likely to live in poverty than non-caregivers.

Often these are the same women who left the workforce temporarily to care for their young children. These women are penalized at both ends of their working lives. As stay-at-home parents, they earned no social security credits or wages. As early retirees, they cut short their Social Security earning years.

What can we do?

I share all these statistics to encourage a few specific outcomes.

  1. If you find a long-term care policy that you can afford and that meets your needs, buy it!

    Someone turning 65 today has a 70% chance of needing long-term care in their lifetime, but 20.4% of applicants ages 50-59 are denied coverage. That number climbs to 38.2% for long-term care insurance applicants ages 65-69. The lesson here is that you should buy long-term care insurance while you are still young enough to be approved for the coverage. And don’t let it lapse!
  2. And my far less modest wish…we must lobby for a public option for long-term care. 

    Initial iterations of the Affordable Care Act (ACA or “Obamacare”) included long-term care insurance. Long-term care was so expensive that it was ultimately dropped from the ACA to ensure the bill’s passage. (In an upcoming story, I’ll share the seedier side of memory care as a for-profit business. It will turn your stomach.) 

But how can we pay for a public option?

Getting wonky

This next bit gets into the weeds with numbers. If you are not interested in exploring this with me, please scroll down to Not an option below.

If you’ve ever scrutinized your paystub, you’ve noticed the FICA deduction. The FICA deduction includes Social Security contributions (6.2%) and Medicare contributions (1.45%). Employers contribute another 7.65% for a total of 15.3% going into Federal Insurance programs.

What few people of modest income realize is that when high-wage workers have earned their $160,200 “base wage” for the year, they no longer make contributions to Social Security. 

Low-income earners pay a greater percentage of their income to Social Security than high-wage earners. For example, someone earning $60,000/year would pay $3,750 in Social Security taxes, the full 6.2% of their income. Someone earning $250,000 per year would contribute $9,932, just 4% of their income since they stop paying in once they’ve reached the $160,200 base wage. (There is a perverse irony here. People living in poverty don’t live as long as the wealthy. The people who contribute more as a percentage of their income will not live long enough to take as much out of the system as their high-earning contemporaries.) 

Why not continue to tax high-wage earners at a higher percentage? We could call this the LTCC (Long Term Care Contribution). 15% of Americans earn over $200,000/year. 

I’m not a policy or budget wonk. I’m sure this idea has been broached and shelved by better minds than mine. Still, I believe we can and should do better.

Not an option

We didn’t have long-term care insurance for Robert. He has always been impossibly healthy with low blood pressure, good cholesterol levels, and a healthy weight. Once someone is sick, the option to buy long-term care insurance disappears for the rest of their life. (I’m a case in point. A pre-existing condition means that I will never be approved for coverage.)

I am very, very fortunate. I’ve been able to pay for Robert’s placement in memory care. For that I am grateful. I have paid for his time in memory care with assets that I might have otherwise used for my retirement or my grandkids’ education, but I will survive this expense. Still, the cost has been staggering and very stressful. Robert is just one of millions, and I’m one of the lucky ones.

I don’t know what the solutions to this problem are. Americans do not have the social structures in place that would spread the burden of dementia care among many. In general, Americans do not have adequate savings for a healthy retirement, let alone a retirement in which hundreds of thousands of dollars are spent in just two or three years of dementia care. Too many will impoverish themselves to care for their loved one with dementia either at home (by retiring early) or by placing them in an expensive care home. 

We are failing our elderly citizens in many ways. Dementia care is just one problem among many.* How does the average wage earner save a quarter of a million dollars for dementia care?

. . . . .

* ~50% of the US homeless population is over the age of 50. But we represent just 17% of the population overall.

5 thoughts on “The stunning cost of memory care”

  1. Your post about costs is so important. My brother has bvFTD. His board and care home in Roseville runs $14,000-15,000 a month. He has the money now but if he lives another 5 years… I consider our family incredibly fortunate that he has assets. But he would hate it that his money is being used like this. Hard to hope for him to die but I know that’s what he would hope for. Sigh…
    I hope you are doing well and will have time with your child and grandchildren during the holidays.

    1. Thank you for your support, Kathleen. I’m so sorry to hear about the cost of care for your brother. Shocking! I know Robert would also hate to see our money spent in this way. Thank you for saying out loud that your brother would rather die than see his money spent in this way. Robert would wish the same were he competent to understand.

      We really need to come up with solutions. As you say, we are the fortunate ones. I would not survive being a full-time caregiver for years and years.

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