America has an aging population, and as such, more and more people are considering options for where and how they’ll live after retirement. Sorting through those choices and determining which is the best one for…
America has an aging population, and as such, more and more people are considering options for where and how they’ll live after retirement. Sorting through those choices and determining which is the best one for your particular situation can be challenging.
Continuing Care Retirement Communities are one option you may consider. Sometimes called life plan communities, CCRCs offer most anything older adults may need as they move through the stages of aging, says Andrew J. Carle, an adjunct professor in the department of health administration and policy and founding director of the program in senior housing administration at George Mason University in Fairfax, Virginia. “The gist of it is they include the full continuum of care options,” meaning everything from independent or assisted living to memory care and skilled nursing care.
Not just focused on health care and assistance in daily living, CCRCs address the range of needs seniors will face after retirement and typically offer housekeeping and dining options, transportation, wellness and fitness programs, recreational activities and a wide range of social activities and outings for residents.
Jean Accius, vice president of the Long-Term Services & Supports and Livable Communities, AARP Public Policy Institute, says CCRCs are a sort of “one-stop shop” where residents can ” age in place. CCRCs are an option that allows individuals to be to be able to stay in one location as their needs change.”
But, Accius notes that while these communities offer the services you need as you need them, that sort of all-inclusive access “comes with a price. There is an entrance fee that can range from $100,000 to a million dollars depending on the community. Also, there’s often a monthly charge that can be anywhere from $3,000 to $5,000,” which means that “for the vast majority of people in this country, this type of care is out of reach.”
Still, Accius says there are about 2,000 CCRCs across the country. This is in comparison to some 30,000 assisted living facilities, which is by far the more popular and affordable option for most people. But for those who can afford it, CCRCs present an option with great amenities. If you’re considering joining a CCRC, weigh these five things carefully before you make any commitments.
One of the very first things you need to consider is whether you’ll be able to afford the buy-in and monthly fees. A 2010 report from the American Seniors Housing Association notes that CCRCs “allow seniors to convert home equity and other assets into housing and to receive daily living services and health care in a way that keeps monthly expenditures more stable.” Some of these contracts include provisions for refunding entrance fees if you leave the facility after a period of time, but conditions vary and understanding exactly what you’re signing and how you’ll pay for it is critical to making the right choice.
In most states, a state agency regulates CCRCs, and this is typically managed through whichever department oversees community or elder affairs. These government entities offer listings of CCRCs within the state and typically also post a consumer guide with information about CCRC in the state. CARF International, an independent nonprofit accreditor of health and human services, offers accreditation for CCRCs, which may be an additional signal that the operation meets certain standards.
According to the Centers for Medicare & Medicaid Services, “Medicare doesn’t cover long-term care (also called custodial care),” because “most long-term care isn’t medical care. Instead, most long-term care is help with basic personal tasks of everyday life, sometimes called activities of daily living,” such as bathing, toileting and dressing. Therefore, you can’t rely on Medicare to cover the cost of a CCRC, and Accius says “Medicaid is a program for people who have spent down their resources and impoverished themselves. It’s really a program for those who are vulnerable,” so it won’t pay for a CCRC.
Carle adds that ” Medicare covers up to 100 days of skilled nursing, and if you have it [while you live in a CCRC] you can use that,” if and when you transition from the independent or assisted living part of the CCRC to the skilled nursing care area. But by and large, Medicare is not part of the equation when talking about how to fund living in a CCRC. Private insurance may provide some coverage depending on the company and the plan, but Accius says the vast majority of people who opt to reside in CCRCs are funding the stay out-of-pocket and have the personal financial resources to do so.
The contracts do, however, include provisions to ensure that you will receive the medical care you need while you’re residing in the CCRC. “If you think about those contracts,” Carle says, “they’re kind of long-term insurance plans, they’re just not called that. You’re essentially buying long-term insurance, and in fact, it’s tax-deductible at a certain level because the IRS considers it prepaid medical expenses.” Complicated for sure, and this is why you should consider the next step: getting your financial planner and attorney to review the contract and its terms very carefully before you commit to anything.
CCRCs typically offer three types of contracts, and it’s important that you understand exactly what each offers and which is the right one for your situation. The first type is essentially an all-inclusive, fixed-price contract. Accius says they’re sometimes referred to a “life care or extended contracts” and they offer “unlimited access to assisted living, medical care or skilled nursing care without additional charges.” This is ideal for someone entering the facility while they’re still healthy and able to live independently. Then, as their needs change, they’re guaranteed to get the care they need. It’s the most expensive type of contract, “but basically it guarantees everything you need at essentially a fixed price,” Carle says.
The second type is “a modified contract, which provides services for a set length of time. When that time expires, if you need additional services, you’ll probably be exposed to a higher monthly fee,” Accius says.
The third type is a fee-for-service contract where you pay only for the services you use. “Your initial enrollment fee into the community will be lower” with this type of contract, Accius says, “but if you need assisted living or skilled nursing home care, you’ll pay for that at market rate when you need those services.”
Carefully considering which contract option is best for your situation will likely involve a consultation with your attorney, a tax accountant and any other financial or legal professionals you work with to make sure you’re getting a good deal and that your interests are protected. “You have to talk to a tax attorney because it’s complicated and it varies by state,” Carle says, and any CCRC you’re considering should make these documents available to you for review.
Accius says it’s important to find out whether the contract allows for any refund of your entrance fee if you leave the facility, as many CCRCs have a provision for that. “It’s important to have those conversations with an administrator and staff at the CCRC when you’re visiting,” so you and your family know what financial impact to expect.
There’s some math involved in determining whether a CCRC is your best choice and when you should move in. Ideally, you’d enter while you’re still healthy and able to live independently to take full advantage of all that these facilities have to offer, but Carle says many people put off making the decision and end up entering CCRCs or assisted living facilities later on when they’re perhaps less healthy or able to live independently. The ASHA notes that “moving to a CCRC is a decision made after careful planning — not one made in desperation due to an urgent health-care need.”
Carle says these calculations can be tricky. “For a lot of people, the math is what scares them away,” and the complexity of the range of contracts and pricing options can be overwhelming and hard to think about objectively, especially when one’s own mortality is being considered. Having an honest conversation about how long you think you’re going to live may be hard to do, but it’s a piece of the puzzle in calculating whether a CCRC makes sense financially for you and your family.
That said, having the ability to stay within the same building or campus for the rest of your life “can be particularly valuable to people who have a spouse,” Carle says. “A lot of times you’ll see a much higher percentage of couples living in CCRCs” because people age at different rates. “One partner is going to need help sooner and they know that. If they want to be together, even if they’re not living in the same unit, at least they’re on the same campus.” So, while a husband might be housed in an independent living unit on the CCRC campus, his wife might be on a different floor or across campus in the memory care unit and he can walk over every day and visit her easily. “I think that’s a lot of the appeal, but it requires a pretty early decision process.”
Depending on the specific CCRC you’re looking at, you may be dazzled by towering glass structures with four-star dining options and a wide range of activities designed to cater to every interest and hobby. Considering what sort of amenities you want access to is important when thinking about where you want to spend your golden years.
Some of these facilities have absolutely everything you’d ever want. “I run an academic program in senior housing and I take my students on tours of these facilities, and more than once I’ve heard, ‘It’s Disney World for seniors,'” Carle says. From restaurants and shops to fitness centers, indoor swimming pools and movie theaters, CCRCs offer a lot of things to see and do. What’s more, “it’s nice to live with people your own age and there’s an activity or group for just about any interest whether you’re into model trains or quilting or pickle ball.”
However, Carle adds that some seniors don’t love the more remote settings where CCRCs have traditionally been built. A beautiful countryside setting may be tranquil, but Carle says many people “don’t want to be sent off to an elderly island somewhere where they’re disconnected from the rest of the world. It doesn’t matter how beautiful it is, a bird in a gilded cage is still in a cage.” So consider where you want to live — close to family? In an urban environment? By the beach?
Some CCRCs are beginning to crop up in vibrant downtown locations and on college campuses around the country. Baby boomers are well educated and many don’t consider themselves old and want to maintain contact with the rest of the world. “Being on a college campus and being around young people — actually there’s been studies that show it makes us physically younger so that’s why they’re very attractive and very appealing,” Carle says.
Making Your Decision
If you’re considering moving into a certain CCRC, Accius says it’s critical that you visit and ask a lot of questions. Find out exactly what services are offered and learn whether “there are opportunities to be involved in a residential council.” Councils give residents a say in how the CCRC operates.
In addition, Accius says it’s important “for families and individuals looking at this option to also ask for financial reports from the CCRC to ensure that it’s financially sustainable.” A spate of bankruptcies in this sector during the Great Recession showed that they aren’t invulnerable to market forces, so find out how the CCRC you’re considering is managed and whether it looks to be a viable business long-term. You should also ask for inspection reports and complaints. CCRCs are regulated at the state level, so find the state agency that oversees the licensure and certification of CCRCs where you’re looking and request records for the facility you’re considering. These documents may help you understand how well run the facility is and whether the care you’ll receive is high-quality.
“It’s also important to find out to how the staff has been trained and how does that training happen from one setting to another,” Accius says, meaning that when a resident moves from independent living to assisted living, for example, what behaviors might signal to the staff that it’s time to make that move and how is it made? And, when you do transition from one setting to another, how does the staff-to-patient ratio change with you?
Lastly, Accius recommends asking if you can spend a weekend or a few days at the community before you commit. “Try it before you buy it to get a sense of whether that CCRC aligns with your culture and where you want to be. It could potentially be a lifetime commitment, and I think it’s really important to spend some time there before you actually sign on the dotted line.”