Dementia has quietly become the most expensive disease in the United States, and the burden falls heavily on families rather than insurers. The reason is not costly drugs or surgery — it is years of day-to-day personal care that the country's main health program for older adults largely does not cover.
The headline numbers
The Alzheimer's Association projects that paid care for people living with Alzheimer's and other dementias will reach about $384 billion in 2025. That figure covers medical care, nursing homes and other paid services — but it leaves out the largest piece of all: care provided free by relatives.
That unpaid care is enormous. The Association estimates that in 2024 nearly 12 million Americans provided roughly 19.2 billion hours of unpaid care, a contribution it values at more than $400 billion, per its 2025 Facts and Figures report. "Unpaid caregiving value" is what that family labor would cost if you had to hire someone to do it. Add it to paid care, and dementia's total economic weight approaches $800 billion a year.
More than cancer, rivaling heart disease
The comparison traces to a landmark study led by economist Michael Hurd at the RAND Corporation, published in the New England Journal of Medicine in 2013. It put the yearly cost of dementia at $159 billion to $215 billion. The direct cost of dementia care purchases — about $109 billion — was similar to direct heart-disease costs (around $102 billion) and well above cancer (around $77 billion). When the value of informal care is layered on, dementia's total surpasses both.
Why it costs so much
Cancer and heart disease are often treated in intensive bursts. Dementia is different: it can last many years, and most of the spending is not medical at all. The greatest cost, RAND found, comes from long-term care — help with bathing, dressing, eating and supervision.
This is "custodial care": non-medical assistance with the activities of daily living. And here is the trap for families: Medicare does not pay for long-term custodial care. It covers only short-term skilled nursing — for example, rehabilitation after a hospital stay — not the open-ended personal care most dementia patients need, the Alzheimer's Association notes. As Boursel has reported in earlier coverage of Medicare's gaps, this is one of the program's least understood limits.
The out-of-pocket squeeze
With Medicare largely sidelined, the bill lands on households. A private nursing-home room averages well over $100,000 a year, and the Alzheimer's Association estimates that, over the course of the illness, families bear roughly 70% of the total lifetime cost through out-of-pocket spending and unpaid care. Many families eventually turn to Medicaid, the joint federal-state program that does pay for long-term custodial care — but only after a person has spent down most of their assets to qualify.
It is set to get worse
The trajectory points up. The number of Americans aged 65 and older living with Alzheimer's is projected to roughly double by 2050 as the population ages, the Alzheimer's Association reports — pushing national costs sharply higher.
This is educational information, not personal advice. But the figures point to questions worth raising with a qualified financial or elder-law professional: whether long-term-care insurance fits your situation, how Medicaid eligibility rules work in your state, and how to support family caregivers whose unpaid hours carry a real, if invisible, price.
