The impact of Alzheimer's disease and other dementias goes far beyond health. The costs associated with Alzheimer's can be staggering for families, with average out-of-pocket costs for health care and long-term care services not covered by Medicare, Medicaid and private insurance exceeding
With people living with Alzheimer's, on average 4-8 years after a diagnosis - and many longer - disease-related costs can jeopardize a family's financial security. Many families and caregivers must make enormous personal and financial sacrifices and major changes to their spending or saving.
Due to the COVID-19 pandemic, the federal government and
"The first thing a person living with Alzheimer's disease or another dementia and their caregiver can do is find a certified tax preparer to navigate the tricky waters of the federal and state tax codes," said
Some out-of-pocket expenditures such as medical expenses, home modifications and private-pay respite services may be deductible. A certified tax preparer can assist with interpreting tax laws and determining what expenses qualify in order to maximize deductions.
Assessing current financial resources is also an important step. Reviewing insurance policies and benefits, as well as retirement plans and pensions provide perspective on current and future financial positions. Financial planners and elder care attorneys can help organize and guide families through the process, especially when trying to qualify for Medicaid coverage.
Learning more about the benefits and limitations of Medicare, Medicaid and other insurance options can prepare families for the following year's tax filings.
"Spending some time today learning about government programs like Medicare, Medicaid and the
Medicare provides health and prescription drug benefits to Americans aged 65 and older. While it covers medical and hospital care, it does not provide benefits for long-term care. Medicaid may cover long-term care expenses, but only if certain income requirements are met.
Knowing the difference between the two, what they pay for and how to qualify can alleviate financial strain. And, when investigating care options, find out if the provider accepts private or government insurance, as few people can afford to pay for skilled nursing care on their own.
"Learning about your insurance options is particularly helpful as you weigh the differences between home care and facilities in the area," James said.
It's never too late to make a plan for how to pay for the costs of dementia care and maximizing their deductibility. Making these preparations before retiring provides an opportunity to work through the complex issues involved in long-term care and explore financial safeguards like trusts.
"But even if you don't create a proactive plan until after a diagnosis is made, it's still important," James said. "Creating a financial plan benefits you at tax time and provides stability in light of an unpredictable disease."
The National Directory of Registered Tax Return Preparers and Professionals has a searchable list of certified tax preparers available to the public at ptindirectory.com.
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