Caring for a loved one with Alzheimer’s or another form of dementia can be very expensive. Costs are magnified by the location where the individual receives assistance and the condition of the patient. There are federal programs that offer financial assistance. All most all states provide some level of help and there are programs for veterans, non-profit assistance, tax credits, and even loans intended to help families afford the cost of care.
Below is a summary of the most commonly covered benefits from Medicare, Medicaid, and Medicare Supplemental Insurance and many lesser-known financial assistance options for Alzheimer’s and dementia. There are links to more information, as well as relevant eligibility requirements.
Medicare provides limited assistance for patients with Alzheimer’s and dementia. Medicare’s benefits are strictly for medical needs and a lot of caring for individuals with Alzheimer’s or dementia is non-medical. Supervision, assistance with dressing, bathing or eating, and transportation are all time-consuming activities but non-medical; therefore, Medicare does not provide coverage or financial assistance. In-home care and memory care (assisted living) are not paid for by Medicare.
Medicare Supplemental Insurance policies, as a rule, do not offer areas of coverage that Medicare does not cover. Instead, Medicare Supplemental Insurance simply helps with co-payments. Therefore, these policies also offer little financial assistance.
Medicare has its benefits; one of those is providing help with diagnostic procedures, prescriptions, and some assistance as these conditions progress and needs become more severe. Read a complete analysis of Medicare’s dementia benefits.
Medicaid is a state-specific program for people with limited income as well as limited financial resources or assets. Having a diagnosis of Alzheimer’s Disease or dementia does not automatically make an individual eligible for Medicaid assistance. However, given that most individuals with Alzheimer’s / dementia have very limited or no ability to work and therefore have limited income, many will qualify for benefits. Certain Medicaid programs allow candidates to deduct their care expenses from their income when calculating income for eligibility purposes. Assets like an individual’s home can also be deducted.
Medicaid’s benefits, unlike Medicare’s benefits, are significantly broader covering Alzheimer’s or dementia costs. For example, while Medicare does not pay for assisted living, Medicaid (in most states) does offer some level of assisted living benefit. Another example, Medicare will pay for nursing home care, but only for 80-100 days, while Medicaid will pay for nursing home care on an ongoing basis. Read about Medicaid eligibility and benefits. Read more about Medicaid eligibility and benefits.
The VA has multiple programs that provide financial assistance for people with Alzheimer’s or other dementia. The disease does not need to be related to their military service. Therefore, veterans and their spouses who develop Alzheimer’s or dementia for any reason will very likely find some type of financial assistance for their care from the Veteran’s Administration. One should not expect the VA to cover the complete cost of caring for a loved one with dementia.
The VA Health Care program provides medical care but not enough non-medical assistance for people with Alzheimer’s or dementia. VA Pensions like the Aid & Attendance program provide a cash allowance that can be used for any type of care including assistance or supervision. More on A&A eligibility for people with dementia..
Veterans-Directed Home and Community-Based Services (sometimes called Veteran Directed Care) is another option that gives veterans control over the type of care they receive and by whom it is provided. HISA Grants provide financial assistance for home modifications that can help an individual with dementia continue to live at home. Read a complete explanation of these VA programs and their eligibility requirements.
Many states offer financial assistance for people with Alzheimer’s or dementia that is paid for by the state’s general fund. Some of these programs are specifically for dementia (and require a formal diagnosis) and others are simply intended for individuals with age-related care needs. Further complicating the eligibility picture is that these programs are typically not entitlement programs. Rather the programs receive a limited amount of funding and are only able to help a limited number of persons. Waiting lists are common. Each state program is different, some prioritize their waiting lists by the severity of need and others simply based on one’s position on the waitlist.
These state-based assistance programs normally offer assistance for Alzheimer’s caregivers by paying for adult day care or for in-home respite care. For example, California, Delaware, Kentucky, and West Virginia have programs for adult daycare. Wisconsin, Vermont, and Oregon have programs that pay for in-home dementia care.
Finding these programs can be a challenge. One should begin by contacting their local Area Agency on Aging (AAA). Typically, AAAs are county-specific. One can locate their AAA here..
Tax Credits & Deductions for Alzheimer’s / Dementia
There are tax credits and deductions that are relevant, but these are not specifically designed for people with Alzheimer’s or dementia. The Tax Credit for the Elderly or the Disabled is one such option that can save families thousands of dollars per year. Read the IRS publication. This tax credit is for individuals or married couples filing their own taxes. It may be more advantageous for an adult child to claim a parent with dementia as a dependent. In this case, the Child and Dependent Care Credit is relevant, provided the adult child (or children) provide at least 50% of the financial support their parent requires. Read more. It is worth noting that many states also have a state version of the Dependent Care Credit. Medical and dental expenses can be deducted and, in some cases, costs associated with residential memory care homes (assisted living) are eligible to be deducted. Even home modifications such as a stair-lift or wheelchair ramp are deductible. Read more.
To be clear, reverse mortgages are not a form of financial assistance. They can be a source of funds for Alzheimer’s or dementia care. A reverse mortgage might not make financial sense and be the best decision for many families. For example, a reverse mortgage becomes due when the homeowner leaves the home, it would not be a good option for a single person with Alzheimer’s who may be moving to a memory care home or a nursing home shortly. In contrast, a reverse mortgage could be a good option for a married couple if one spouse intends to reside in the home for many years.
A caregiver mortgage is a type of reverse mortgage where a parent can use their home equity to pay their adult child for in-home care. This can be beneficial in many ways. If done properly, adult children are compensated as caregivers, the parent receives the care they require, the home is protected from a Medicaid estate recovery, and inheritance taxes may be minimized. There are many variations of caregiver mortgages and they may be referred to by different names including Family Funded Reverse Mortgages, Caregiver Contracts, and Personal Care Agreement. Regardless of the name, caregiver mortgages are complex and a professional should review and assist before entering into any agreements.
Alzheimer’s Care Loans
There are loans that are specifically designed to help families with the cost of elder care. These loans are bridge loans meant for periods of time less than two years. These loans are given to families that have an immediate need for care (such as moving to a memory care / assisted living residence) and will have funds in the future but do not have immediate access to those funds. For example, take a person who is applying for a Veterans’ Pension. The application process can take up to a year, but when approved, the funds are paid retroactively back to the application date in a lump sum. In this example, a loan is made and re-paid when the applicant is approved and paid back from the lump sum they receive. Another common scenario for elder care loans is when a person moves to memory care and is selling their home. It can take months or even a year to prepare and sell a home, but when it is sold, the borrower will have funds available to repay their loan.
Non-Profits and Foundations
Local non-profits organization and national foundations are other potential sources of financial assistance. These organizations tend to provide services instead of cash assistance. Commonly, an organization will provide respite care free of charge or for highly reduced rates (when compared to hourly home care costs).
There are very few sources of financial assistance for long-term nursing home care for people with Alzheimer’s or dementia. The majority of long-term nursing home care in the United States is paid for by Medicaid. To a lesser extent, the Veteran’s Administration has programs specifically for veterans who require a higher level of care. However, the veteran’s need for nursing home care must typically be related to their military service, not due to Alzheimer’s or dementia (unless it can be proven that their dementia was related to their military service). Veterans nursing home care is an entitlement and for the vast majority of individuals with Alzheimer’s or dementia who require nursing home care, Medicaid is the best option. More on Medicaid eligibility for nursing home care.
Medicare does not pay for ongoing long-term nursing home care for people with Alzheimer’s or dementia. The Medicare program limits beneficiaries to 100 days of nursing home care and pays for 80% of the cost.
Assisted living facilities specifically for people with Alzheimer’s or dementia are called Memory Care. Financial assistance for memory care comes from a variety of sources. Medicaid, through a state’s HCBS Waivers, will pay for a portion of memory care costs. Remember, Medicaid will not pay for room and board in memory care homes. Medicaid-funded memory care is not an entitlement like nursing home care. Rather, enrollment is limited and waitlists are common. One can take a non-binding Medicaid eligibility pre-screen here.
The Veterans’ Aid and Attendance Pension is another popular program that helps pay for memory care for war-time veterans with Alzheimer’s or other dementias. This program also assists the surviving spouses of war-time veterans. Veterans-Directed Home and Community-Based Services (VD-HCBS) is another potential source of financial assistance for memory care. While VD-HCBS will not pay for assisted living directly, these programs will pay for an outside caregiver to come to an assisted living residence and provide assistance with the activities of daily living such as bathing and grooming. Learn more about these programs here.
Loans for memory care exist. However, these are only relevant to people awaiting another source of funding. This can be relevant if your loved one is waiting for a VA Pension to be approved or waiting for a home to sell.
Some states provide financial assistance for memory care from their general fund instead of through their Medicaid programs. However, these states are limited, enrollment in the programs is limited and the amount of financial assistance they provide is also limited. One should not expect any state program to cover the full cost of memory care. Also, traditional assisted living or memory care may not be covered while adult foster home care may be covered. Adult foster homes typically have 1 to 5 residents.
|State||Memory Care Assistance Programs (Updated Feb. 2023)|
|Colorado||Adult Foster Care Program (not available in all counties)|
|Connecticut||Adult Family Living (service under the Home Care Program for Elders)|
|Hawaii||Community Care Foster Family Home Program|
|Indiana||Residential Care Assistance Program|
|Maryland||Senior Assisted Living Group Home Subsidy|
|Massachusetts||Supportive Senior Housing Initiative|
|Minnesota||Housing Support Program|
|New York||Assisted Living Program|
|North Carolina||Adult Care Home Special Care Unit|
|North Dakota||Expanded Service Payments for the Elderly and Disabled|
|Pennsylvania||Domiciliary Care Program|
|Rhode Island||SSI Enhanced Assisted Living Program|
|Texas||Adult Foster Care (under the Community Care for Aged/Disabled program)|
|Virginia||Auxiliary Grants for Assisted Living|
There are many sources of financial assistance for dementia care in the home. Medicaid through Home and Community Based Services provides home care. Medicaid is primarily thought of as a source of funds for nursing home care but administrators have found it can be less expensive to assist at home preventing and even delaying the need for more expensive nursing home care. Medicaid at home has different eligibility criteria than nursing home Medicaid, and the financial and functional need eligibility criteria are different in every state. See state specific Medicaid home care eligibility criteria.
The VA also offers financial assistance for veterans with Alzheimer’s or other dementia. Most relevant are the VA Aid & Attendance pension, the Housebound pension, and the Veterans Directed Home and Community-Based Services. More information on both programs is available here.
Reverse mortgages, while not financial assistance, are a source of funding. Reverse mortgages are relevant to paying for home care, but less so in assisted living or memory care because when the homeowner moves from the home, their reverse mortgage becomes due.
State-specific, non-Medicaid programs are common. Many of these programs are not specifically designed for people with Alzheimer’s or dementia but can be used for their care. Nearly all states offer some form of assistance, but typically these programs have income eligibility criteria set fairly low. Another drawback to these programs is that often they have limited funding, their programs are full and waitlists for assistance exists. The best way to determine if your state offers a program for dementia home care and to determine if a wait list exists is to contact your local Area Agency on Aging.
Many families want to care for a loved one at home but need extra help and looking at adult day care (also called Alzheimer’s Day Treatment) is a good and affordable option. This is ideal for families who need support during work hours and is more cost-effective than residential memory care or private home care.
Medicaid will cover the cost of adult day care for low-income seniors with Alzheimer’s and dementia across the United States. More on Medicaid eligibility. VA Pensions and Veterans-Directed Home and Community-Based Services allow the beneficiary to choose the type of care they require so families can elect to spend the extra assistance on adult day care.
Most states offer some financial assistance for adult day care, although these programs may not be specifically for adult day care or individuals with dementia. The table that follows is not comprehensive of all state-based assistance that can be used for adult day care but includes programs that are specifically intended for that purpose.
|State||Adult Day Care / Alzheimer’s Day Treatment Programs (Updated Feb. 2023)|
|Alaska||Adult Day Services|
|Arizona||Home and Community Based Services|
|California||Alzheimer’s Day Care Resource Center|
|Connecticut||Home Care Program for Elders|
|Delaware||Alzheimer’s Day Treatment|
|Florida||Alzheimer’s Disease Initiative|
|Georgia||Home and Community Based Services|
|Kansas||Senior Care Act|
|Massachusetts||Home Care Services|
|Minnesota||Alternative Care Program|
|Nevada||Community Options Program for the Elderly|
|New Jersey||Alzheimer’s Adult Day Services Program|
|New York||Expanded In-home Services for the Elderly (EISEP)|
|North Carolina||Caregiver Alternatives to Running on Empty|
|Tennessee||Adult Day Services|
|Texas||Day Activity and Health Services|
|Vermont||Dementia Care Respite Program|
|Wisconsin||Alzheimer’s Family and Caregiver Support Program|