Health and long-term care for people living with Alzheimer's and other dementias is projected to cost $409 billion in 2026, according to the Alzheimer's Association's 2026 Facts and Figures report. Medicare and Medicaid are expected to cover $263 billion of that, which is 64 percent. That figure leaves out the value of unpaid care from family and friends.
Those numbers explain why CMS built a dementia-specific payment model. This guide sets out the figures, who pays, what families absorb on top, and how the numbers connect to the way GUIDE and other value-based models measure success.
How Many People Are Affected?
The 2026 report estimates that 7.4 million Americans age 65 and older are living with clinical Alzheimer's dementia. About 1 in 9 people in that age group, or 11 percent, has the disease. Without medical breakthroughs that prevent or cure it, the number could reach 13.8 million by 2060.
Alzheimer's disease was officially listed as the sixth-leading cause of death in the United States in 2024, with 116,022 death certificates recording it. Between 2000 and 2024, reported deaths from Alzheimer's increased 134 percent, while deaths from stroke, heart disease and HIV decreased. The Alzheimer's Association also reports that 1 in 3 older adults dies with Alzheimer's or another dementia.
What Does Dementia Cost the Health System?
The Alzheimer's Association projects these figures for 2026:
$409 billion in health and long-term care costs for people living with Alzheimer's and other dementias
$263 billion expected to be paid by Medicare and Medicaid, which is 64 percent
$103 billion expected in out-of-pocket spending by families
The report estimates the lifetime cost of care for one person living with dementia at $405,262 in 2024 dollars. It projects total payments for health care, long-term care and hospice care to reach nearly $1 trillion by 2050.
Who Pays?
Public programs carry most of the bill. Medicare and Medicaid together are expected to cover close to two-thirds of 2026 costs. Families pay a further $103 billion out of pocket, according to the same projection.
For a value-based care operator, that split matters. Most of the spending sits with the payers that CMS is trying to reshape. When a program reduces avoidable spending on dementia patients, the beneficiary is largely the public program, and that is why CMS has designed models around cost and utilization measures.
The Cost Families Absorb
The report's $409 billion figure doesn't include unpaid care. In 2025, more than 12 million family members and other unpaid caregivers provided an estimated 19.6 billion hours of care to people living with Alzheimer's or other dementias. The Alzheimer's Association values that care at $446.3 billion.
The report also notes that the costs of unpaid caregiving extend to caregivers' increased risk of emotional distress and negative mental and physical health outcomes.
The value of unpaid care ($446.3 billion in 2025) is larger than the projected paid bill for 2026 ($409 billion), and it depends on caregivers staying well enough to keep going. Value-based dementia models treat that as a cost driver, which is why GUIDE includes a caregiver measure and a respite benefit.
Why These Numbers Shape Payment Models
CMS launched GUIDE on July 1, 2024, as an eight-year model. Its Performance Measurement Manual says CMS expects to reduce Medicare and Medicaid spending mainly by delaying or preventing long-term nursing home stays, and secondarily by reducing the use of inpatient hospital, emergency department and post-acute care.
Two of GUIDE's five performance measures track those goals directly:
