Making a Decision On a CCRC?

The New York Times ran a story at the end of February about the appeal of a Continuing Care Retirement Community or CCRC.  (Just a note that LeadingAge, a group of aging service organizations is using Life Plan Communities). The Everything-in-One Promise of a Continuing Care Community examines the appeal of CCRCs.  Looking at how it works, the article discusses the often-times hefty entrance fee and compares that to a “fee for service model”. The article explains what one gets (and what one doesn’t) when one is signing a CCRC contract: “[k]eep in mind that few of these contracts involve direct, conventional purchase of a housing unit. In most cases, the resident buys only the lifetime right to live in a community, take advantage of its range of amenities and services, and receive care there. The units generally are not bought and sold on the open market.”

My co-blogger, Professor Pearson is quoted in the article discussing regulatory oversight and transparency:

“There’s a lack of transparency with C.C.R.C.s that’s resulted in weaker trust,” said Katherine C. Pearson, a professor at the Dickinson School of Law of Pennsylvania State University who has testified before Congress on the issue. “You need to visit several facilities, talk to residents, look at past cost increases and five years of financial records.”

Professor Pearson, who talks with continuing care community residents around the country, said there was no one rule of thumb to use when evaluating these communities. A prospective resident generally wants a community that is active and engaged and “supports healthy living,” she said. But given the magnitude of the decision (after all, it is often the last major purchase someone will ever make), it deserves very careful consideration.

“Get as much financial information as you can,” she said. “This is not an impulse buy.”

The article offers some practical advice when considering a CCRC. The article notes it isn’t as easy as an apples to apples comparison since there is no government rating system of CCRCs and “[t]he major drawback in evaluating continuing care communities is the complexity of their contracts, which come in a number of variations. Some may require a deposit of up to $1 million, while others may charge only monthly fees. Refunds may be difficult to obtain and depend upon the length of stay and other requirements. Contract details have to be read carefully and financial statements reviewed.”  The article suggests

• review of the contract by a team of professionals, and look specifically at the contract regarding refunds of the entrance fee, whether there is a rescission period, how a decision is made if the resident needs a higher level of care and the financial stability of the company.

• visiting the CCRC and talking to residents and staff. Visit all areas of the CCRC.

• compare several CCRCs and check with the appropriate state agency for any complaints filed vs. the CCRC. Ask around-the article suggests the local senior center might be a good place to find out more.