Alzheimer’s disease and related dementias cost the United States an estimated $781 billion in 2025, making it one of the most expensive conditions in the country. That figure includes medical bills, long-term care, and the enormous economic value of unpaid work by family members. For individual families, the financial burden depends heavily on the stage of the disease and the type of care involved, but costs routinely reach tens of thousands of dollars a year out of pocket.
The National Price Tag
Of the $781 billion total, about $232 billion goes toward direct medical and long-term care spending. Medicare covers the largest share at $106 billion, followed by Medicaid at $58 billion. Families and individuals pay roughly $52 billion out of pocket, and private insurance and other payers account for the remaining $16 billion.
The rest of that $781 billion comes from less visible costs: the economic value of unpaid family caregiving, lost wages, and reduced productivity. The replacement cost of unpaid family care for dementia alone runs between $42 billion and $80 billion per year (roughly 44% of the $96 to $182 billion total for all older adults). Family caregivers also lose about $107 billion annually in earnings, with 80% of that loss coming from people who leave the workforce entirely rather than just cutting back hours.
What Families Actually Pay
The biggest out-of-pocket expense for most families is nursing home care. Research tracking costs from 2016 onward found that families pay an average of about $7,200 per year in out-of-pocket nursing home expenses, with total out-of-pocket costs (including home health care) averaging around $7,900 per year. That number can be misleading, though, because it’s an average across all families, including those whose costs are largely covered by Medicaid. If you’re paying privately for care, the actual bills are far higher.
The Alzheimer’s Association puts the 2024 median cost of a paid home health aide at $34 per hour. At 40 hours per week, that comes to roughly $70,700 a year. Assisted living facilities run a median of $5,900 per month, or about $70,800 per year. Specialized memory care units typically cost more than standard assisted living, though prices vary widely by region.
How Costs Change as the Disease Progresses
Alzheimer’s gets dramatically more expensive over time. A five-year Finnish study tracking patients from early through severe stages found that total care costs in the early stage averaged about €16,400 per year. By the moderate stage, costs were 3.4 times higher. In the severe stage, they reached 4.4 times the early-stage amount, roughly €72,600 per year. While these figures are from a European healthcare system, the pattern holds in the U.S.: as a person loses the ability to manage daily activities, the need for hands-on care (and its cost) rises steeply.
Early-stage costs are dominated by doctor visits, medications, and diagnostic testing. Late-stage costs shift heavily toward round-the-clock supervision, whether that’s in a nursing home or through home aides working multiple shifts. This is the transition that catches many families off guard financially.
What Medicare and Medicaid Cover
Medicare pays for doctor visits, hospital stays, diagnostic imaging, and certain home health services. It also covers stays in a skilled nursing facility, but only for the first 100 days, and only after a qualifying hospital stay. After that, you’re responsible for the cost yourself unless Medicaid steps in.
Medicaid does cover long-term nursing home care, including memory care units, but eligibility is based on income and assets. Most people need to spend down their savings before they qualify. This creates a painful middle ground where families earn too much for Medicaid but can’t afford years of private-pay nursing home costs, which can easily exceed $100,000 annually in many parts of the country.
Diagnostic Testing Costs
Getting a diagnosis itself carries costs worth knowing about. A PET scan to detect amyloid plaques in the brain runs roughly $3,500 to $8,000, with a base cost around $4,700. A spinal fluid test costs about $750. Newer blood-based biomarker tests are cheaper, ranging from $500 to $1,200, and are increasingly used as a first screening step to determine whether more expensive imaging is needed. Medicare coverage for these tests varies depending on the specific test and clinical circumstances.
Newer Medications Add to the Bill
The newer class of Alzheimer’s drugs that target amyloid plaques in the brain, including Leqembi, carry high list prices. Under Original Medicare, patients pay the standard 20% coinsurance on Part B drugs after meeting their deductible. For a drug with a list price of $26,500 per year, that coinsurance alone could run over $5,000 annually. Supplemental insurance or Medicare Advantage plans may reduce that amount, but coverage details vary by plan.
The Hidden Cost to Caregivers
More than 11 million Americans provide unpaid care to someone with Alzheimer’s or another dementia. The financial toll on these caregivers goes well beyond the time they spend helping. On average, dementia caregivers lose about $5,000 to $6,300 per year in earnings, depending on race and ethnicity. White caregivers lose an average of $6,323 annually, while caregivers from racial and ethnic minority groups lose about $4,875, a gap that reflects differences in baseline wages rather than caregiving intensity.
These lost earnings compound over time. A person who leaves the workforce at 55 to care for a parent with Alzheimer’s doesn’t just lose a decade of salary. They lose retirement contributions, Social Security credits, and career advancement. By 2060, researchers project that forgone earnings for all family caregivers of older adults will reach $380 billion per year, with dementia caregiving accounting for a growing majority of that total.
Planning for the Real Numbers
If you’re trying to plan for a family member’s care or your own, the realistic annual range depends on the level of care needed. In the early stages, when someone lives independently with periodic medical visits and perhaps a few hours of weekly help, costs might stay in the range of $10,000 to $30,000 per year. Once full-time supervision becomes necessary, whether at home or in a facility, annual costs commonly land between $70,000 and $120,000 or more.
Long-term care insurance, if purchased before a diagnosis, can offset some of these expenses. Veterans’ benefits, state-level assistance programs, and Medicaid planning with an elder law attorney are other avenues families use to manage the financial burden. The average duration of Alzheimer’s from diagnosis to death is four to eight years, though some people live with the disease for 20 years, meaning total lifetime costs can range from a few hundred thousand dollars to well over a million.