What is a continuing care retirement community?

Caring for a senior loved one is a significant consideration for many people, and selecting the best living arrangement can get complicated. While most older adults want to stay in their homes as long as possible, it's not always the most financially or medically feasible option. But what if they don't yet need the level of medical care that assisted living or nursing home facilities provide? Continuing care communities can be a flexible, longer-term option for active and social older adults.

What is a continuing care retirement community?

A continuing care retirement community (CCRC), also known as a life care community, is a living facility for older adults that helps them "age in place." Many offer various levels of care to support older adults throughout the aging process. Designed to meet residents' current and future needs, CCRCs typically offer independent and assisted living options, on-site healthcare services, and 24/7 access to medical professionals. 

The primary purpose of a CCRC is to offer senior loved ones the opportunity to live in a single location for as long as needed, providing additional peace of mind that their needs will be met regardless of how their health or cognitive abilities change over time. Good CCRCs are designed to accommodate changes quickly.

What are the levels of a continuing care retirement community?

There are generally four levels of a CCRC:

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• Independent living: The first stage is for older adults who are active, healthy, and don't require serious ongoing care yet. Independent living residents may have their own room or apartment with access to a dining hall, community facilities, and social events. Services such as maintenance and housekeeping may be included or offered for an additional fee.

• Assisted living: Older adults who need more support with activities of daily living (ADLs) can receive round-the-clock custodial and medical services with assisted living. At this level, residents get help with ADLs like bathing, dressing, or medication administration, but are still encouraged to be as independent as possible.

• Memory care: Designed for older adults experiencing memory loss due to dementia or other cognitive conditions, on-campus memory care provides specially trained staff to work with residents. These services prioritize comfort, engagement, and safety to provide peace of mind to families while delivering the expert care residents need.

• Skilled nursing care: Life care communities typically have on-site nursing care that provides medical and custodial services 24/7. This differs from hospice or long-term care, as skilled nursing care at CCRCs typically focuses on short-term care or rehabilitation services. For instance, if a resident suffers a stroke, they may receive physical or speech therapy in the skilled nursing facility with the aim of eventually returning to assisted living.

Understanding continuing care retirement community contracts

CCRC contracts tend to be extensive and complex, so it's critical to review them closely (ideally with assistance from a reputable legal professional) to understand what you're getting from the community. There are three standard contracts CCRCs typically use:

• Extensive life-care contract (Type A): These contracts are comprehensive and guarantee residents access to various levels of care throughout their lives. These plans cost the most but offer the most comprehensive services, allowing residents to move through the community at no additional cost when their financial or medical circumstances change.

• Modified contract (Type B): This contract restricts residents to prepaying for part of future medical treatment, not all of it. If your senior loved one requires more care than was initially agreed upon in the contract, you can expect the monthly service charge to increase. For instance, if a resident transitions from independent living to skilled nursing, additional costs will likely be incurred.

• Fee-for-service contract (Type C): Type C contracts include an upfront entrance fee and a monthly service charge. These are typically the most cost-effective option, but the least comprehensive. Rather than requiring payments for all or some services upfront, Type C is more akin to an à la carte contract, requesting payments for additional services as they arise.

When reviewing CCRC contracts, these are some of the essential questions to ask:

• What is the cost structure?

• How frequently will fees be updated?

• How are costs expected to rise in the future?

• What payment arrangements do you offer?

• What services are included with the entrance fee?

• What are the additional fees for uncovered services?

• If you've moved in as a couple, how does pricing change if one partner requires greater care than the other?

• What happens if a resident needs to move to a different level of care, but there is no available vacancy?

• Are any fees refunded upon a resident's passing?

• Can a resident decide to leave the community, and if so, will they receive a refund of any fees?

Pros and cons of a continuing care retirement community

While CCRCs attempt to provide a wide range of services on one campus, they aren't an ideal solution for everybody.

Benefits

• Security of aging in place: Nobody likes moving, but it becomes much more difficult as we age. CCRCs provide the security of knowing this is where you will be for the rest of your life.

• Peace of mind for residents and families: Changing care needs can cause significant stress for older adults and their families. Knowing your senior loved one has access to all essential services on the same campus offers more peace of mind.

• Access to amenities and services: Residents typically don't have to worry about major maintenance and home care. They may also have access to various amenities, such as pools, tennis courts, community events, and other services.

Challenges

• High upfront costs: CCRCs are very expensive, both upfront and in the future, so they require significant financial planning. Entrance fees can be as high as $350,000.

• Adjustments to community living: Some residents may not feel comfortable in a lively community setting initially, especially if they've been living independently for a while.

• Complex contract terms: CCRC contracts sometimes generate more questions than they answer. That can be time-consuming for families or a power of attorney who needs as much clarity as possible to plan for the family's future, often within a short timeframe. 

How much do continuing care communities cost?

CCRCs are very expensive. Entrance fees can range from $300,000 to $350,000, with additional monthly charges from $5,000 to $10,000. As mentioned, Type A contract fees are typically higher, while Types B and C may have more flexibility. 

Note: Even with lower upfront fees, you may still incur future charges for medical expenses and other unforeseen issues.

Generally, CCRCs charge similar monthly fees to other elder care options, such as assisted living facilities or in-home care, but their entrance fees are significantly higher.

FAQs

What happens when you run out of money in a CCRC?

Most reputable CCRCs have fallback plans. If you can't pay a monthly fee, they may apply the original entrance fee toward those costs, work with you to downsize amenities or services, or help you apply for financial assistance through a community benevolent fund.

What is the best age to enter a CCRC?

It depends on an older adult's health and desire to join a CCRC. That said, it's a good idea to begin considering a CCRC around the age of 75.

What are the disadvantages of a CCRC?

The most significant disadvantage of a CCRC is the high cost, especially the entrance fees. Some also have complex contracts that can be challenging for potential residents and their caregivers to navigate.

Does Medicare pay for continuing care retirement communities?

No, Medicare does not pay for CCRCs. However, it may kick in to help pay for certain medical services received while a resident at CCRC. You can't use it for CCRC costs, but it may help with medical care.

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