Life plan communities, often referred to as continuing care retirement communities (CCRCs), are an increasingly popular choice of aging Americans. These communities offer the array of care options necessary as seniors move through the stages of aging that include independent or assisted living, memory care, and skilled nursing. Beyond health care CCRCs offer a wide range of services “such as housekeeping, dining options, transportation, fitness and wellness programs, recreational activities as well as social activities and outings for residents.” It is essentially “aging in place” except in a community environment. There are approximately 2,000 CCRCs in the country as compared to about 30,000 assisted living facilities primarily because the price of a CCRC is about $3,000 to $5,000 a month. If you can and are considering joining a CCRC, there are some parameters to consider very carefully.
- How will you finance your contract and fees?
Can you afford the buy-in and associated monthly fees? If necessary, a senior is allowed to convert home equity and other assets into their initial expenditure to join a CCRC however, the vast majority of seniors who choose to reside in a CCRC have the personal financial resources to fund the stay out-of-pocket. All facilities and contracts are different. Each state has an agency that regulates CCRCs, and the government entities offer listings and a consumer guide about the CCRCs available in your state. There is also an independent nonprofit organization called CARF International, which provides accreditations for CCRCs and their services.
Overall, you will not be able to use Medicare to cover the cost of a CCRC because Medicare Services do not cover long-term care. The exception for Medicare coverage is if you use skilled nursing services while in your CCRC facility; Medicare will cover up to 100 days of that service. Because these CCRC contracts are similar to a “long-term insurance plan” it is tax-deductible because the IRS considers it a prepaid medical expense. The financial picture is different for every individual and every facility so get with your financial planner and elder law attorney to carefully review the contract and its terms before committing to anything.
- What contract should you agree to?
While every CCRC is different, there is some standardization in the three types of contracts that are typically offered. The first is an all-inclusive, fixed price contract. While it is the most expensive contract, it provides unlimited access to all of the assisted living, medical care or skilled nursing care at no additional charge. This contract is best for someone entering the facility while still healthy and independently able. The second option is a modified contract that provides services for a set length of time which is a gamble. In the event you outlive the contractual timeline the additional services required are likely to expose you to a higher monthly fee. The third type of contract is a fee for service which means you only pay for the services you use. Fee for service contracts typically lowers your entry cost into the community, but you will pay market rate for assisted living or skilled nursing care if you need those services.
- When should you consider moving into a CCRC?
The best time to make a move into a CCRC is when you are healthy and able to take advantage of all the facilities have to offer. Being in a community that provides health and wellness strategies above and beyond medical care can allow you to age more successfully and with fewer health incidents. Moving into a CCRC is not a decision to be made in desperation because of an urgent health care need. The complexity and range of the CCRC contracts and pricing options need your careful thought and review with professional guidance to optimize your aging experience. Seniors with a spouse find a CCRC living choice particularly gratifying because partners will need different medical help at different rates. Even if the couple is not living in the same unit due to medical conditions they are at least on the same campus.
- What is the best location for you?
The social and activity amenities offered in CCRCs are very interactive and keep residents engaged. However, if the location of the campus is remote from urban environments, you might feel isolated and disconnected from the world at large. Some CCRCs are popping up in downtown locations and even on college campuses around the country. So be certain when considering a move to a CCRC you ask yourself if the site appeals to you for the long term. Also, find out how far removed it might be from family members you want to visit with often.
There are many questions to ask when contemplating a move into a continuing care retirement community. Visit the property and bring a family member or legal counsel to ensure the proper inquiries are made and that answers are complete. Ask to spend a week at the facility to experience it first hand and avoid buyer’s remorse. You are deciding whether to reside at a property for the rest of your life and must be sure that the facility is a fit for you. Because there have been bankruptcies in the CCRC business sector, you must review the facility’s financial sustainability. You do not want an unsuccessful CCRC to force you into a relocation process late in life that can be financially, physically, and emotionally draining.
At the Estate Planner LLC, we help clients prepare for the future. Contact our St. Louis office at 314-303-3218 to request an appointment to discuss the legal aspects of your long-term care planning needs.
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