Continuing Care Retirement Community (CCRC)
Continuing Care Retirement Community
A continuing care retirement community (CCRC), sometimes known as a life-care community, is a type of retirement community in the U.S. where a continuum of aging care needs—from independent living, assisted living, and skilled nursing care—can all be met within the community. These various levels of shelter and care may be housed on different floors or wings of a single high-rise building or in physically adjacent buildings, such as garden apartments, cottages, duplexes, mid- and low-rise buildings, or spread out in a campus setting. The emphasis of the CCRC model is to enable residents to avoid having to move, except to another level of care within the community, if their needs change.
Typically, all of the living options (independent living, assisted living, and skilled nursing) of a Continuing Care Retirement Community (CCRC) are on a single campus.
Typically, seniors move into a CCRC while still living independently, with few health risks or healthcare needs, and will remain there until end of life. Most CCRCs require both health and financial assurances for admission. As seniors progress in age, and medical needs change, the level of nursing care and service increases proportionally in response. In such a way, the needs of seniors are consistently monitored and catered to, particularly as those needs become more intensive. If greater illness or injury warrants hospitalization (not available in CCRCs), the senior may return to his or her CCRC residence after recovery, and should receive appropriate rehabilitative care.
Continuing-care retirement communities are attractive for seniors who find themselves living in increasing social isolation as they age, who would like to be immersed in a hospitable environment with other people of similar age and would like to plan for their long-term health care needs. Typically, a range of activities and amenities are provided for both recreation and resource. However, CCRCs are costly, and vary widely in entrance and recurring fees.
Types of assistance and care
In most CCRCs there are three levels of care:
independent living, in which residents care for themselves and enjoy housekeeping services and a wide array of other services and amenities in the community. Some CCRCs have special programs, to help residents with successful aging.
assisted living, in which residents are given help as needed with daily tasks such as bathing and dressing in the residential unit or in a dedicated facility in the community.
24-hour nursing home care, usually in a dedicated skilled nursing facility.
In addition, many CCRCs have a fourth level of memory support care, in addition to assisted living and skilled nursing; some offer home- and community-based care, expanding their reach into the greater community; and a few provide the last level of end-of-life care.
Types of contracts
Often, a life-care contract is required, and the stipulations within such contracts can also vary in terms of service. Contracts typically specify the shelter arrangements, residential services, personal and health care, and nursing care that they are guaranteed during their stay in the CCRC. These agreements also specify the present costs to the residents of living in its community and using its resources, the conditions under which costs may be increased, and the conditions under which residents must transfer among its levels of care. These contracts are designed to protect the rights of the older residents, but they also give the owners of CCRCs considerable influence as to what long-term care benefits older residents receive.
The American Seniors Housing Association (ASHA) distinguishes three principal contract types: Type A or life care (also known as extensive or all-inclusive); Type B or modified; and Type C or fee-for-service (ASHA, 2002). These contracts reflect the differences in the way CCRCs charge for personal assistance and nursing care and the extent to which they guarantee the availability of this care without additional costs to residents. In practice, CCRCs will often offer residents contract arrangements that represent a blend of these three contract types.
Type A or Life Care contracts – CCRCs offering Type A or life care contracts guarantee their residents shelter, residential services, and amenities along with personal assistance and nursing care for the rest of their lives in return for an initial entrance fee and a monthly payment schedule. CCRCs usually offer these contracts to seniors who initially occupy their congregate or independent living units. The entry fees may be nonrefundable or partially refundable depending on the length of the resident’s stay. Under the life care contract, residents who move to the assisted living or nursing home accommodations of the CCRC continue to pay a monthly fee similar to what they had for their independent living accommodations. CCRCs agree to increase these fees only to compensate for normal operating costs increases. In this way, CCRCs absorb the risk of any increases in the cost of providing health and long-term care to residents with Type A contracts.
Type B or Modified contracts – often have lower monthly fees than Type A contracts, while including the same housing and residential amenities as Type A contracts. However, only some health care services are included in the initial monthly fee. Under the modified contract, when residents move to a higher level of care, the CCRC agrees to charge the independent living rate for only some specified time period, after which residents must pay either a full or a discounted per diem rate. For example, a resident may receive 30, 60, or 90 days of assisted living or nursing care without an increased charge. Thereafter, residents would pay the market daily rate or a discounted daily rate, as determined by the CCRC, for all assisted living or nursing care required and face the risk of having to pay higher costs for needed care.
Type C or Fee-for-Service contracts – often require an entrance fee lower than Type A or B or none at all. Under the Fee-for-Service contract, residents receive priority or guaranteed admission to the CCRC’s higher levels of care, but they are not entitled to any discounted health care or assisted living services. Rather, on entering a CCRC’s assisted living facility or nursing home, they pay the regular and usually higher price per diem market rate. Older residents admitted directly into a CCRC’s assisted living facility or nursing home would typically sign fee-for-service contracts. Under the Type C contract, the risk of high long-term care expenses rests with the resident.
Some CCRCs offer a fourth type of contract, Type D or rental agreements, which generally require no entrance fee, but a monthly fee for basic independent living amenities, with guaranteed access to CCRC services and health care. Type D contracts are essentially pay-as-you-go, and residents take on the risk of all expenses and their increases in exchange for little or no entrance fee.
Few CCRCs offer an equity model, in which the resident owns the residential unit that may be resold later.
Most CCRCs offer more than one type of contract with some options introduced in response to recent economic conditions. Consumer selection of contract types appears to favor the type of contract the CCRC has offered the longest, rather than any particular analysis. Even though a CCRC’s entrance fees (in Type A, B, and sometimes C contracts) represent in part lump-sum long-term care insurance premiums (or prepayments of future costs) paid by all non-rental residents upon entry for health care that is used at any given time by only a small subgroup, the “sweet spot” for the entrance fees appears to be determined not actuarially but by whether it resembles locally affordable housing, viz., whether the entry fee is at or below the local market home values. Entrance fees are sometimes marketed as fees to “reserve your home”. Most residents raise the money for entrance fees by selling their homes.
A simple and rough way to compare contracts is to calculate the total expected combined entrance and monthly fees over a typical resident’s expected lifetime in the community, i.e., the simple actuarial model.
How much does this cost?
Entrance fee for Life Care Agreement varies based on facility and if refundable or non-refundable. You can expect to pay between $148,700 to as much as $1,270,000. Monthly service charge ranges between $2,924 to $7,742 per month.
Monthly service charge include: 1-3 meals per day prepared and served 24-hour security General maintenance & repairs to apartment, some utilities, except telephone, programs, entertainment, activities Fitness Center, library, and pool.
Life Care Agreement – Lifetime use of residence even if higher level care is needed
Financial Review required
Health benchmark assessments
Price/cost depends on type of unit, floor, size, side of building, # of people in unit
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