Consider a CCRC as a Long-Term Care Solution
Selecting where to live later in retirement is a big decision that involves one new major consideration: health care. We are faced with tremendous uncertainty, because we don’t know how long we will live, how much care we will need, what type of care we will need, or how our medical decline will unfold. The big question is: Will we each make the last housing decision on our own and ahead of time; or will we have a non-choice thrust upon us when a health crisis hits?
There are a variety of long-term care options, and with all of them there are many uncertainties regarding the future cost, quality of care, on-going changes, potential disruptions, trust issues, bill paying, Medicare coverage, etc. These options include in-home care, living with relatives, assisted living facilities, nursing homes, or a Continuing Care Retirement Community (CCRC).
For example, if we elect to remain in our existing personal residence, this will eventually require the hiring of caregivers and/or nurses. While this is a good choice for some, it does create some complexities. The biggest concern is finding, retaining, and eventually replacing qualified help (of differing skills) with people you can trust—and doing so on an on-going basis. This help may start out with meal delivery, move on to hiring a visiting certified nurse’s assistant, then to a day nurse, and finally to full round the clock coverage. This must all be managed and paid for with a strong advocate for the resident. In addition, the house must be kept up and eventually a move to a nursing facility may be required. Finally, remaining at home can result in far less social support than some of the other options.
However, there is one option that does the best at minimizing these uncertainties and complexities; yet also provides a solid social support system. This is the “all-inclusive” Continuing Care Retirement Community (CCRC) - also known as Life-Care Communities, Type A, or Extensive Life-Care Contracts.
Thinking about our eventual housing and medical care is particularly important today. With increased longevity, family dispersion, busy children, and a better (yet, more unpredictable) healthcare environment; long-term care simply cannot be ignored.
What is a CCRC?
Think of a CCRC as a college campus for older folks! However, there is less emphasis on education (and beer) and more on medical care (and prescription drugs). A CCRC is not a 55 and older community where you are simply a homeowner. A CCRC provides housing, healthcare, housekeeping, meals, fitness classes, and recreational/social activities under a contractual agreement. You are guaranteed access to a rising level of care and living arrangements as needed - all on one “campus”. Living arrangements include apartments or single-family homes for new and independent seniors, to assisted living and nursing facilities. Because CCRC’s offer many services on the same campus, you receive the level of care you need while remaining in a familiar community near friends and family.
All inclusive CCRC’s promise to provide the care you may require in a setting appropriate for that level of care. You don’t have to worry about what comes next. There is less of a need for a close family advocate. Couples have the comfort of living “together” even as one spouse needs more care than another.
Most of the all-inclusive CCRC’s are non-profit (~80%), and many (50%) are faith-based with a “benevolence clause”. This means that even if you run out of money, they will still take care of you. Most new residents are age 75-80 and are of middle-to-upper income levels.
Local all-inclusive CCRC’s include Cokesbury (Hockessin), Kendal-Crosslands (Chadds Ford), and Country House (Wilmington). In addition to the Type A, all-inclusive contract, Type C contracts are also very popular. A Type C contact is also known as a “fee-for-service” CCRC because residents pay an increased cost when and if they begin receiving long-term health care such as assisted living or nursing care. Therefore, since these costs are not built into the up-front fee, fee-for-service CCRC’s generally have a lower up-front fee This option is preferred by someone who doesn’t want to pay for what they don’t think they will need, or when the client has a long-term care policy (which will help pay for these additional costs if needed). As I have written elsewhere, my father is in a fee-for-service CCRC in New Holland, PA called Garden Spot Village, and talked about his experience in another of our blog posts found HERE.
The social support that is available at a CCRC cannot be emphasized enough. By moving into a CCRC where you find a good social “fit”, and while you are still physically active (say age 75-80), you will develop a strong social support system that will provide emotional support when you need it most (i.e., visits when you are sick). Clients that move into CCRC’s continue to live an active and independent lifestyle including maintaining a second home or traveling extensively.
How Much Does a CCRC Cost?
An all-inclusive CCRC is an insurance product where you are paying for guaranteed, unlimited, as-needed medical care (whether you end up using it or not). While not cheap, they are certainly affordable (for our typical client). Fees (which may be partially or wholly deductible) are comprised of an up-front entrance fee and an on-going monthly fee.
Entrance fees run (locally) from $200,000 - $500,000 depending on the type of “initial” housing unit desired and if an entrance fee refund option is selected. Most retirees have a home that is “paid-off”, and therefore, upon a sale, have the funds to pay this type of entrance fee. Residents don’t own their housing unit, but instead have the right to live in the community for the rest of their lives. Monthly fees range from $2,000 – $7,000, also depending on the housing being used. The fees remain the same (although they are generally adjusted for inflation) regardless of the level of care needed. They also may cover (depending on the community) dining, social, laundry, fitness/recreational facilities, transportation, housekeeping, and utilities.
When Should You Consider a Move?
Most of us think of ourselves as about 15 years younger than we actually are! Therefore, it is easy to put off a move to a CCRC until it is too late. You will not be eligible for entry if you (or BOTH of you) can’t live independently or can’t pass a mental competency test. The other strong reason to go in early are the benefits of making new friendships early on, and for the rest of your life. Finally, some CCRC’s have waiting lists that can be years.
Evaluating a CCRC
Evaluating CCRC’s is too extensive a topic to cover in this article. However, I will provide two quick tips. First, the financial strength of a CCRC must be assessed. The most important element of financial strength is the occupancy rate. With a low (say under 90%) occupancy rate, the community may have trouble maintaining capital improvements, or providing needed services. You can get historical occupancy rates from the CCRC. Second, meet with the president of the residence board. This board is made up of occupants who are meeting with management regarding issues such as food, staff, quality of care, and building maintenance. They have their pulse on the CCRC and are likely quite willing to speak with potential residents. To learn more, view the FOLLOWING GUIDE.
Also, the following site (CARF - an independent, nonprofit accreditor of health and human services) provides helpful information on selecting and evaluating CCRC's.
With a CCRC, your costs are quite predictable. You know where you are going, you know what you are getting, and your community remains with you regardless of your health or financial situation. There is peace of mind, certainty, and support in selecting an all-inclusive CCRC.