Many older adults need a little assistance as they age, and there’s a spectrum of senior living options available today. The best-known places are:
— Independent living facilities.
— Assisted living communities.
These options can address the needs of a senior who doesn’t want to live alone at home, could use a little extra help or might require round-the-clock care.
But there’s a fourth option available that may be less well-known. It’s a sort of one-stop-shop living alternative called a continuing care retirement community, or CCRC.
What Are Continuing Care Retirement Communities?
CCRCs, which are sometimes called life plan communities, “are designed to provide comprehensive support for seniors and others through different retirement and care stages,” explains Bob Rees, chief sales officer with eHealth Inc., a health insurance broker and online resource provider headquartered in Santa Clara, California.
More specifically, a single CCRC campus can house independent living, assisted living and nursing care facilities. Residents can age in one level and transition to the next as their care needs change.
This progression of care — which sets CCRCs apart from other types of senior living arrangements — gives seniors the chance to develop friendships and communities that remain intact, adds Sue Johansen, a San Francisco-based executive vice president with A Place for Mom, a senior advisory service.
[READ: Activities of Daily Living for Seniors.]
What Is the Purpose of a CCRC?
CCRCs are the last place a senior needs to move to in order to get all of their future health and well-being needs met.
These communities provide on-site medical care, notes Dr. Barbara Bawer, a clinical assistant professor at the Ohio State University Wexner Medical Center in Columbus, and other benefits.
CCRCS, for instance, come with easy access to amenities, such as outings, fitness classes and hobby and crafting sessions, and peers, which can help reduce loneliness. Unlike other senior living options, residents have more freedom in their own cottage, condo, studio or duplex, rather than in a room in a facility.
[READ: 7 Signs It May Be Time to Move to a Senior Living Facility]
What Levels of Care Do Continuing Care Retirement Communities Offer?
CCRCs offer a broad range of care levels for residents. Typically, these include:
— Level 1: Independent living. This is the first level most residents enter when moving into a CCRC, and it involves the least amount of care. Seniors gain access to all the amenities of the community and still live independently in their own apartment or condo.
— Level 2: Assisted living. This second level offers more support for activities of daily living as needed. Many seniors progress to this level when they need more help with certain tasks, such as cooking, bathing or medication management.
— Level 3: Skilled nursing care. Some seniors may need even more day-to-day support than assisted living can generally offer. They may move into a nursing-centric portion of the CCRC, which provides more intensive support with daily tasks and round-the-clock nursing care.
— Memory care. For some seniors experiencing cognitive decline or dementia, memory care may be an additional level of care they need to access in a CCRC as their health needs change.
[READ What Are the Levels of Senior Living?]
Costs and Contracts for CCRCs
While CCRCs can be a one-stop shop for virtually any senior care need, that care doesn’t come cheap. CCRCs involve a significant financial commitment and may be quite expensive.
“CCRCs usually require an upfront investment known as a ‘buy-in,'” Johansen says. “Upfront fees can range from the low six figures to more than $1 million. These buy-ins do not include the monthly fees that CCRCs charge. However, once a resident has paid their upfront fee, the monthly rates are locked in at a predetermined level, no matter the type of care required.”
Locking in a low monthly fee over the course of many years can be a wise financial decision given the costs of skilled nursing facilities, which are only expected to rise. Genworth Financial’s 2021 Cost of Care Survey (the latest data available) notes that skilled nursing in a private room costs $108,405 annually on average.
CCRC contract options depend on the services, amenities and living arrangements available. Some common types of contracts include:
— Type A. Also called life care contracts, these contracts cover senior housing, residential services and amenities, and access to health care without a big increase in monthly payments. This comprehensive contract type may leave room for annual inflation-based increases, but they offer the least amount of financial volatility for seniors as their needs change. Type A contracts usually come with a higher initial buy-in fee and may require that the senior undergo a medical clearance and meet certain financial qualifications.
— Type B. Also called modified life care contracts, these plans cover only specified levels of care. As a result, they limit which aspects of the community a senior will be able to access unless they pay extra when services are rendered. There’s more financial risk to the senior with this type of contract, so the initial buy-in fee is often a little less than with a Type A contract.
— Type C. Also called fee-for-service contracts, this option usually costs less for the initial buy-in but doesn’t offer seniors the same financial security over the long term that a Type A contract can. As a senior moves from one level of care to the next, their monthly costs will increase with this type of contract.
— Type D. Also called rental contracts, this option offered by some CCRCs allows the senior to rent the residence month-to-month. There usually isn’t a large upfront buy-in with this approach. However, the monthly rate will be higher than in a Type A contract, and certain services may not be guaranteed.
— Type E. Also called equity or co-op agreements, these contracts allow the resident to purchase the residence instead of paying an upfront entry fee. They will also pay a monthly service fee. Additional services, such as health care, can be purchased as needed, usually at market rate or slightly below.
How to Check the CCRC Contract
It’s critical to read any contract carefully before signing. Bawer says that some CCRC contracts can be complex and you may need to have a financial advisor or lawyer review them.
“You could have financial loss if the CCRC goes bankrupt for any reason,” she adds, because you don’t own your home within the CCRC.
If the buy-in price at a CCRC is too steep, there are some alternatives. Jennifer Avila, executive director of Custom Home Care, a home services and home nursing agency in the Chicago area, suggests checking out rental retirement or assisted living communities that don’t require a hefty upfront free or long-term commitment.
“These are good options for seniors who may decide to relocate in the future to be near family, who don’t have the funds for a CCRC or who want to keep their nest egg invested,” she points out.
Pros and Cons of Continuing Care Retirement Communities
There are quite a few pros and cons you or your loved one will have to consider before deciding to move into a continuing care retirement community. These may include:
— Age and current health status.
— Financial benefits.
— Social advantages.
— Timing.
Age and current health status
Time is a critical factor for moving to a CCRC. CCRCs typically require a health assessment, and they can deny an application if the applicant doesn’t meet the health requirements, Avila says.
Because many CCRCs have long waiting lists, “you may be denied if your health condition has changed by the time an apartment is available,” she adds. “You should have a backup plan in mind.”
Actuarial consulting firm Milliman reports that new residents entering a CCRC typically range in age from 65 to 95, but they must be able to live independently when they arrive. Over the past decade, the average age at move-in has increased, with many facilities reporting that their residents are 80 to 83 years old. CCRCs older than 10 years tend to have residents between the ages of 85 and 87.
Financial benefits
“There are clear advantages to moving into a CCRC as a ‘young’ senior,” Johansen says. “One major one is financial — you are locked into a fixed monthly fee after your buy-in costs, no matter the level of care you might need in the future.”
The financial specifics vary by community, and your monthly rate will depend on where the facility is located, what the buy-in rate is and many other factors that will be wholly specific to your situation.
However, as Rees notes, “a lot of seniors are anxious about how they will pay for long-term care when the need arises. It’s important to note that Medicare does not cover CCRCs, though it may cover skilled nursing care when that care is rendered in a CCRC, in some circumstances.”
Social advantages
Most CCRCs are big, highly social settings, says Dr. Susan D. Leonard, a geriatric medicine specialist at the UCLA Medical Center in Los Angeles.
“Those who like social activities will also get the benefits of a more lively and interactive setting,” she explains. “Once someone is better adjusted, the services can be customized over time to meet their needs at any point in their life.”
Plus, moving to a CCRC early can allow residents the opportunity to form relationships with other community members from the get-go.
“This helps seniors maintain an active life and limit the sense of isolation that often comes with retirement and aging,” she notes.
This approach can be especially helpful for seniors who may have recently lost a spouse.
“Rather than grieving alone, a CCRC provides these seniors with a strong social network to help them in what can be one of the most difficult and lonely times of their lives,” Johansen adds.
Timing
Timing the move depends on when the senior feels ready, Leonard says.
“It can be when one is ready to move out of their own home and transition to a senior living environment to be in a larger community with others,” she points out.
Some CCRCs offer health and wellness programs, such as nutritional counseling and fitness programs, adds Dr. Steven Tam, a geriatrician with UCI Health and associate clinical professor at the UCI School of Medicine in Irvine, California. Taking advantage of those programs early can be beneficial for the long term.
Ultimately, Tam says, “the timing of moving to a CCRC may be different for each individual.”
Finding CCRCs Near Me
Options for and costs of CCRCs can vary greatly depending on where in the country you live. U.S. News & World Report provides specialized CCRC resources for more information about what’s available in your neck of the woods.
Planning to Move to a CCRC
Before you choose to move into a CCRC, it’s important to research and ask questions.
“Visit and look around to find a place that would be comfortable for you or your loved one,” Leonard advises. “Some may allow a trial weekend or week stay.”
Questions you should consider asking include:
— Can you see yourself living here for the rest of your life?
— Do the residents seem like the type of people you’d enjoy living with or around?
— Can you envision being friends with them?
— What sorts of activities are available on the campus, and do they sound appealing?
— Can the staff accommodate particular requests or personal preferences?
— What are their licensing and standards requirements?
— Do they have inspection reports available?
— Are there any other outstanding issues or concerns regarding the property or how the business is being run?
Avila adds that it’s important to check the quality of the health care facilities, such as skilled nursing and rehab, that are part of the CCRC. She recommends sitting in on one of the resident meetings or town hall meetings to see how management and residents interact and conduct business.
“Most communities have these meetings monthly,” she says, “and you will find out what the residents really think about the food and the amenities.”
Buyer Beware
One note of caution: Johansen says prospective residents “should also understand the business model of a potential CCRC. Traditionally, CCRCs were run as nonprofit organizations, though today some CCRCs are run by for-profit institutions.”
This distinction is important, she notes, because “if a CCRC is for-profit, you’ll want to understand how a potential sale of the business would affect the resident and their contract.”
For example, if the CCRC is sold to a new owner, that could potentially negate resident contracts or result in a renegotiation of the terms of contracts already in place.
Some CCRCs also have clauses in their contracts regarding whether or not you can get your money back if you decide it’s not the right fit. Some will provide a full refund up to a few months after move-in; others have stricter limits. This is why it’s critical to read everything and ask all the questions you have before you sign on the dotted line.
Bottom Line
As with any contract, read the fine print before accepting the terms of any CCRC contract. You may want to involve an attorney and/or a financial planner in determining whether you’re getting a good deal and to make sure any contract you or a loved one signs is fair. When it comes to this kind of financial commitment, buyer beware and do your homework.
Tam also recommends taking your time in making this big decision.
“Review and compare the different options as well as the requirements and services provided at the different facilities and care levels,” he advises. “Take the time to tour the community and meet people there and get their opinions of the community.”
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When’s the Right Time to Move Into a Continuing Care Retirement Community? originally appeared on usnews.com
Update 01/08/24: This story was previously published at an earlier date and has been updated with new information.
