The costs of caring for people with Alzheimer disease (AD) in California are estimated using data from a study of the costs of caring for community-resident and institutionalized people with AD, combined will prevalence and population projections. Costs for community-resident patients will increase 83 percent in the period 2000 ($23.4 billion) to 2020 ($42.8 billion), and will grow an additional 59 percent from 2020 to 2040 ($68.1 billion). Costs for AD patients in institutions will increase 84 percent from 2000 ($2.5 billion) to 2020 ($4.6 billion), and will grow an additional 61 percent from 2020 to 2040 ($7.4 billion), assuming the supply of nursing home beds meets projected demand. Total costs of caring for AD patients will nearly triple between 2000 and 2040. The rapid aging of the U.S. population makes more aggressive societal action necessary if the personal and societal burden of Alzheimer's disease is to be reduced in the future.