Continuing Care Retirement Communities

Basic information about continuing care facilities.

Continuing care retirement communities (CCRCs), or multi-level care facilities, provide residents with a lifetime continuum of care. They assure the care recipient independent living as long as possible, and provide for nursing assistance if or when it is needed. This type of living arrangement can be particularly useful to financially sound couples who are in need of different levels of care and who wish to maintain a strong relationship, even though the typical CCRC resident is a physically and financially independent, 80-year old, highly educated, single female.

Although CCRCs gained a somewhat negative reputation in the 1980s because some closed due to financial difficulty, the number of CCRCs in the United States has reached about 1,200 and continues to grow. Approximately 350,000 residents live in these for-profit and not-for-profit facilities, and this number will continue to increase as more individuals are able to meet the eligibility requirements for CCRCs. Entrance restrictions normally specify a minimum age, as well as a certain level of health and finances. CCRCs generally look for perspective candidates who:

  • Have an annual income that is 1.5–2 times the monthly fee.
  • Will not financially cost more than they contribute while a resident

Entrance lists are often months or years long for such facilities, so it’s best to start looking into continuing care facilities well before your loved one is planning to move.

Levels Of Care

Most CCRCs provide three separate levels of care: independent living units (ILUs), assisted living, and skilled nursing care. In some cases individuals move progressively through these levels of care so that they need little care in the beginning and progressively require a greater amount of care. In other cases, residents require additional care for a period of time and then return to independent or assisted living.

  • During the first of these levels, ILU, the resident lives in his or her own residential unit. Double occupancy units exist for married individuals, but the majority are single units in the form of studio apartments, one-bedroom, two-bedroom, or larger units. During this period, residential services might include housekeeping, laundry services, and meals. Acute medical treatment in the form of skilled nursing, physical therapy, or assistance with personal needs is also available. During this period residents are most likely to take advantage of the residential facilities, which can include craft rooms, gardening areas, golf courses, recreational facilities, tennis courts, swimming pools, or walking trails.
  • Assisted living is an intermediate level of care that some residents experience between independent living and skilled nursing care. During this phase, residents with chronic care needs are assisted both medically and with personal care tasks (bathing, dressing, eating, etc.).
  • Finally, skilled nursing care is also offered by the majority of CCRCs in the form of short- and long-term nursing care and rehabilitative services. These services are often offered on-site, although some facilities contract with nearby nursing homes.

Under almost all circumstances, an individual must be healthy and reasonably independent to be admitted to a CCRC. The level of care needed by the resident is initially assessed, and this process should be clearly explained in the residential contract. Normally, care is assessed by a group that includes family members, medical advisors, and the manager of the CCRC. Residents should be reassessed on a regular basis—as well as when circumstances require reassessment—to identify services required by the individual. CCRCs offer many services, including:

  • Craft and woodworking activities
  • Educational programs
  • Exercise classes
  • Gardening space
  • Housekeeping
  • Laundry services
  • Meal services
  • On-site nursing and health care
  • Organized social and recreational activities
  • Personal conveniences (haircutters, banks, library)
  • Processing of Medicare and insurance reimbursement forms
  • Security systems
  • Transportation 

Fees And Payment

The availability of these activities can make CCRCs quite expensive, and all fees should be clearly detailed in the initial membership contract. Before your loved one signs a contract, you should have a financial advisor look over your loved one’s finances to make sure that he or she will be able to meet the terms of the contract for the years to come. Additionally, the financial advisor should look over the finances of the CCRC to make sure that it is a sound financial investment for the future.

Three types of payment plans exist for CRCCs, including a plan with an entry and monthly fee, a plan with a rental fee, and a plan based on equity.

  • Entry and monthly fee plans are the most widely used. Under this type of plan, the resident pays a sizable up-front entry fee, which may be nonrefundable, refundable on a declining basis over time, partially refundable, or fully refundable. The policies concerning the initial entrance fee vary between CCRCs, so check the contract of the specific facility to learn more about its policy. On average, entrance fees range from $60,000 to $120,000 and monthly fees of $1,000 to $1,600 are charged to cover expenses associated with the living unit, required medical care, and services.
  • Rental plans use a rental or monthly fee to cover housing and services. Many times health care isn’t included in these services, so check carefully when looking at these plans.
  • Equity-based plans allow individuals to purchase their own living area. In doing so, individuals also gain money from the appreciation of the living area, but are allowed to resell the unit only to qualified individuals. In these situations, an owner’s association governs the residential services and health care, which residents can purchase in addition to the living area.

Regardless of the payment plan, costs vary due to age, gender, marital status, and location of the facility. Your loved one should expect to pay higher rates if he or she:

  • Is young and financially secure such that monthly rates can be paid for a long time
  • Is female (because of the longer life-expectancy)
  • Is married because there is a greater likelihood that one spouse will become ill and the other will eventually move to a smaller living unit, increasing turnover in the unit
  • Is looking for a unit in the South, West, or Northeast rather than the Great Lakes or Central regions of the United States

Also, it is important to have an attorney review the CCRC contract before your loved one signs it. Remember that this document is legally binding and intended to last for the remainder of the perspective resident’s life. Payment contracts for CCRCs are set up in one of three ways: extensive, modified, and fee-for-service.

  • Extensive contracts are the most comprehensive and cover amenities, residential services, shelter, and long term nursing care without an increase in monthly payments (except for normal inflation adjustments). The structure of extensive contracts spreads health risk among all residents so that no resident will experience financial ruin. Most CCRCs offer this type of contract.
  • A modified contact covers amenities, residential services, shelter, and only a specified amount of nursing care. After the duration of the specified nursing care has been used, a resident may pay for required services on a daily or monthly basis.
  • A fee-for-service contract covers amenities, residential services, and shelter, but only emergency or short term nursing care. Residents must pay for long-term nursing care at daily rates.

Overall fees for each type of contract become lower as the level of services provided decreases. It is also important to note that the majority of CCRCs participate in Medicare, Medicaid, or both programs.

Finding The Right Facility

Since there are no federal regulations for CCRCs, find out if any state or local guidelines exist. Additionally, check to see if the facility is accredited by the Continuing Care Accreditation Commission (CCAC)—an independent accrediting body sponsored by the American Association of Homes and Services for the Aging. Accreditation by the CCAC means that the facility has met set standards in the areas of residential life, health and wellness, financial resources and disclosure, and governance and administration. This accreditation requires CCRCs to submit annual financial statements and must be renewed every five years.

As with all residential communities, before your loved one signs up for a continuing care retirement community he or she should interview several facilities. When you interview prospective CCRCs, you might want to take a list of questions with you. Below are some questions to ask if your loved one is interested in continuing care facilities—ask these in addition to the more basic questions you would ask about any residential facility. Additionally, it is smart to visit a facility several times before making a final decision. While you are there, be sure to eat with residents, talk to the staff, and pick up a current copy of the resident handbook. If possible, try to stay in the guest quarters a time or two as well.

Questions specific to CCRCs include:

  • Is the facility accredited by the Continuing Care Accreditation Commission (CCAC)?
  • Are there fitness facilities on the premises?
  • What types of recreational activities are offered? How often? Who plans them?
  • Is there a community council that allows residents to voice concerns and help in managing the community?
  • What types of community rules and regulations exist?
  • Can residents have pets?
  • What happens if a couple moves in and one of the individuals falls ill and must move to a nursing home? Is the other required to move? What happens if the spouse gets well after the other has moved?
  • How long will the community maintain a living unit if a resident is temporarily placed in a nursing unit?
  • Under what other conditions might your loved one be asked to move?
  • What is the entrance fee and under what circumstances is this fee refundable?
  • How are the monthly fees established and what are these fees estimated to be?
  • What services are included for these fees?
  • Under what conditions can these fees be increased?
  • Who decides what type of care individuals require? How often is this reassessed?
  • What type of health care is provided at the facility? Short-term? Long-term?
  • What are the limits, if any, to the health and medical care covered by the regular fees?
  • Can Medicare or Medicaid be used at the nursing/health center?
  • What are the policies for transferring an individual between levels of care? (Get these in writing.)
  • Does the facility guarantee that a nursing home on or near the property will be available when needed?
  • What actions are taken if your loved one’s personal financial resources are depleted?

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