Dementia's Mounting Toll on the U.S. Economy

Dementia costs Americans hundreds of billions of dollars per year, and the annual cost could top half a trillion dollars by 2040 due to the "graying" of the U.S. population. The "market costs" of dementia already exceed those for cancer and heart disease, while the "informal costs" of home care for those with dementia can raise the total expense nearly 50 to 100 percent, depending on the calculation method. The National Alzheimer's Project Act, signed into law in 2011, calls for these kinds of cost calculations, along with new treatments and improved care for people with dementia. In addition, says research leader Michael Hurd, director of the RAND Center for the Study of Aging, "This calls for an insurance-style solution, one in which the costs of long-term care could be spread across the entire population rather than being concentrated on the unlucky few."

Market Costs

Market costs of dementia in 2010
Out of pocket$23,688,502,158
Formal home care$21,715,097,716
Nursing home care$53,067,752,009

Informal Costs

Millions of Americans provide unpaid, informal care for a family member with dementia, and many nonrelatives provide care as well. This informal caregiving represents a cost to society in the form of lost productivity and income. Researchers took two approaches to estimating the value of informal care: forgone wages (what caregivers would have earned if they had spent their time working in the labor market rather than caring for someone with dementia) and replacement cost (the cost of the equivalent service when provided through a home health agency).

Informal home care cost per estimation approach
Forgone wages50 billion dollars
Replacement cost106 billion dollars

Dementia's 2010 annual costs relative to other diseases

109 billion dollars
Heart Disease
102 billion dollars
77 billion dollars

Who has dementia?

3 in 20 Americans 71 or older have dementia

  • 12% of women
  • 9% of men
  • 17% of Hispanics
  • 10% of whites
  • 18% of other race/ethnicity
  • 15% of unmarried
  • 7% of married
  • 16% who didn’t finish high school
  • 10% of high school grads
  • 7% who went beyond high school

Soaring Caseload

Cases of dementia may more than double by 2040

Projected dementia cases
20103.8 million
20204.5 million
20306.4 million
20409.1 million

That’s an increase of about 5 million Americans with dementia

Soaring Costs

Dementia's total annual economic cost will grow accordingly

Projected dementia costs (using replacement cost)
2010215 billion dollars
2020255 billion dollars
2030361 billion dollars
2040511 billion dollars

That's an increase of 138%

SOURCE: "The Monetary Costs of Dementia in the United States," New England Journal of Medicine, Vol. 368, No. 14, April 4, 2013, pp. 1326–1334, Michael D. Hurd, Paco Martorell, Adeline Delavande, Kathleen J. Mullen, Kenneth M. Langa.

NOTE: All totals in 2010 U.S. dollars.

Infographic by Erin-Elizabeth Johnson and Dori Gordon Walker. Photo illustrations adapted from iStockphoto/Thinkstock.

This report is part of the RAND infographic series. RAND infographics are design-focused, visual representations of data and information based on a published, peer-reviewed product or a body of published work.

This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited; linking directly to this product page is encouraged. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial purposes. For information on reprint and reuse permissions, please visit

RAND is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.