Alzheimer’s disease and related dementias will cost the United States an estimated $818 billion this year, according to a new USC-led study. This is largely due to the often overlooked costs to people living with dementia and the family and friends who provide their care.
In addition to medical and long-term care costs, the researchers’ cost model takes into account factors that are often not captured in other estimates of the economic cost of dementia, such as reduced quality of life, loss of income for people with dementia and their care partners, and extensive unpaid care from family and friends. The 2026 estimates are based on a multi-year, federally funded research project quantifying the annual cost of dementia in the United States and reflect progress since the first report last year.
Key findings from the study, published June 24, include: Alzheimer’s Disease and Dementia: Journal of the Alzheimer’s Association:
- Dementia population: By 2026, 5.7 million Americans will be living with dementia, including 5.1 million over the age of 65.
- Impact on quality of life: The reduced quality of life of people with dementia, characterized by declines in cognition, function, and independence, carries the largest cost at $320 billion. Informal care partners experience an additional $15 billion in quality of life losses related to mental and physical burden.
- Unpaid care: Approximately 5.2 million people, many of them of prime working age, provide 6.8 billion hours of unpaid care to a family member or friend with dementia, valued at $237 billion.
- Medical expenses: Long-term care and medical costs for people with dementia total $222 billion. Medicare and Medicaid cover about 70% ($154 billion), and patients and families pay 20% ($46 billion) out of pocket.
- Lost wages: People with dementia and their care partners give up $23 billion in income annually.
Evolving cost models enable more informed decisions
The U.S. Dementia Cost Project’s 2026 report, funded by a cooperative agreement with the National Institute on Aging, builds on last year’s findings as researchers continue to refine cost estimates.
This year’s peer-reviewed estimates take into account lost income for people living with dementia and include new modeling of the health-related quality of life impact on care partners. Also new this year are peer-reviewed papers published on methods for making data, assumptions, and modeling accessible and transparent.
This project aims to provide the most comprehensive account of the economic impact of dementia to date, while strengthening the capacity of researchers and policy makers to address dementia. Tracking changes in dementia costs over time, including changes in who pays for dementia costs and over time, could inform policy and treatment decisions.
This cost model incorporates large, nationally representative datasets, including the Health and Retirement Survey and administrative health data from the Centers for Medicare and Medicaid Services. Researchers are using dynamic microsimulation to predict how new treatments, care models, and policies will impact future dementia costs. This includes the often-hidden effects on your well-being and finances.
“By providing a comprehensive and transparent estimate of the total cost of dementia each year, our study can inform decisions about how to allocate resources as the dementia population grows significantly,” said principal investigator Julie Zisimopoulos, principal investigator of the U.S. Dementia Costs Project, co-director of the Aging and Cognition Program at the University of California Schaefer Center for Health Policy and Economics, and professor at the University of California Price School of Public Policy. “Our modeling approach allows us to ask and answer questions such as how new treatments that slow dementia improve quality of life or impact demand for care in nursing homes.”
Science and dementia care are rapidly evolving. New treatments can slow the progression of Alzheimer’s disease, and FDA-approved blood tests can detect Alzheimer’s disease before symptoms appear. New care models can also help people with dementia stay at home longer while supporting their families.
A remarkable innovation, if effectively leveraged, has the potential to change the trajectory of dementia in the United States. The evidence we are building on dementia costs will give health systems a clearer understanding of these and future innovations. ”
Dana Goldman, Founding Director, USC Schaefer Institute
This interdisciplinary research team is comprised of leading experts from across USC, including the Schaefer Center and Price School, Mann School of Pharmacy and School of Pharmacy, Davis School of Gerontology, and Viterbi School of Engineering, as well as researchers from the Alzheimer’s Association and the University of Pennsylvania. This cost model is informed by the experiences of public health leaders, health care providers, and care partners of people with mild cognitive impairment and dementia, which are shared through a panel discussion hosted by the Alzheimer’s Association.
The U.S. Dementia Costs Project is funded by a cooperative agreement (#U01AG086827) with the National Institute on Aging, part of the National Institutes of Health.
sauce:
USC Schaefer Center for Health Policy and Economics
Reference magazines:
Tunel, J. others. (2026). The cost of dementia in the United States in 2026. Alzheimer’s disease and dementia. DOI: 10.1002/alz.71480. https://alz-journals.onlinelibrary.wiley.com/doi/10.1002/alz.71480
