The total cost of care for the 5.6 million people in the United States living with dementia is estimated at $781 billion in 2025, and about 30% of the cost ($232 billion) is for medical and long-term care services. Another 30% of the total cost was for informal care provided by family and friends. About 39% of the cost, $302 billion, is due to the loss of quality of life for persons with dementia, and 1% of the cost, $6 billion, represented the cost of lower quality of life for care partners. The remaining 1%, $8 billion, represented lost earnings for care partners.
The estimates were developed using a data modeling tool called the United States Cost of Dementia Model. It uses data from individuals who responded to the federally conducted Health and Retirement Study (HRS) and includes data from the Centers for Medicare and Medicaid Services. The data points include health status, health care costs, work status, family and caregiving arrangements, and personal finances.
For the $232 billion in medical and long-term costs, Medicare paid 46% ($106 billion), and Medicaid paid 25% ($58 billion). Consumers spent 22% ($52 billion) of the costs out-of-pocket. Other payers covered the remaining 7% ($16 billion).
The estimates were reported in The Cost of Dementia in 2025, led by principal investigators Julie Zissimopoulos, Ph.D., and Dana Goldman, Ph.D. The researchers lead the United States Cost of Dementia project and created the United States Cost of Dementia Model to estimate current and future costs of dementia.
They calculated the value of the loss in quality of life for people with dementia and their caregivers in terms of quality-adjusted life years (QALYs), which account for various aspects of health, including cognition and function. They estimated the value of QALYs again assuming people with dementia instead had mild cognitive impairment that did not progress to dementia. They valued the difference in QALYs at $150,000 per QALY. They assumed a differential of 0.01 QALYs between care partners and persons not providing care.
The researchers calculated earnings loss by estimating the annual earnings of middle-aged adults who have parents with dementia. They participated in the workforce at the same rate as similar adults without a parent who has dementia. The comparison assumed that middle-aged adults had similar workforce participation rates in both scenarios.
The full text of The Cost of Dementia in 2025 was published April 24, 2025, by The U.S. Cost of Dementia Project. A free copy is available online at https://schaeffer.usc.edu/wp-content/uploads/2025/04/The-Cost-of-Dementia-in-2025.pdf (accessed May 1, 2025).
For more information, contact: Jason Millman, Communications, The U.S. Cost of Dementia Project, Leonard D. Schaeffer Institute for Public Policy & Government Service, University of Southern California, 635 Downey Way, Verna & Peter Dauterive Hall, Los Angeles, California 90089-3333; 213-821-0099; Email: jmillman@usc.edu; Website: https://schaeffer.usc.edu/research/the-cost-of-dementia-in-2025/
August 2025 00US25EUA0023