A continuing care retirement community — commonly called a CCRC or life plan community — is a type of senior living community that offers multiple levels of care on a single campus. Residents can move from independent living to assisted living to skilled nursing care as their needs change over time without having to relocate to a different facility. This continuum of care is the defining feature that distinguishes CCRCs from other types of senior living options.
CCRCs are designed to provide older adults with a long term home where they can age in place knowing that whatever level of care they need in the future will be available to them on the same campus.
Levels of care in a CCRC
Most CCRCs offer three levels of care:
- Independent living — for active seniors who do not need personal care assistance but want to live in a maintenance free environment with access to amenities, social activities, and dining options. Independent living units are typically apartments, cottages, or villas.
- Assisted living — for residents who need some help with daily activities such as bathing, dressing, and medication management but do not require intensive medical care. Assisted living in a CCRC is typically provided in a dedicated wing or building within the community.
- Skilled nursing care — for residents who require around the clock medical supervision and personal care assistance. Skilled nursing care is provided in the CCRC’s on-site health center or nursing facility.
Many CCRCs also offer memory care for residents with Alzheimer’s disease or other forms of dementia either as a separate unit or integrated within the assisted living or skilled nursing levels.
Types of CCRC contracts
One of the most important aspects of choosing a CCRC is understanding the type of contract being offered. There are three main types of CCRC contracts each with a different financial structure:
- Type A — Life Care contract — the most comprehensive and most expensive type. Residents pay a substantial entrance fee and monthly fees that cover unlimited access to all levels of care on the campus at little or no additional cost beyond the base monthly fee. The CCRC essentially guarantees lifetime care regardless of how much care the resident needs. This type of contract provides the most financial predictability but requires the largest upfront investment.
- Type B — Modified contract — residents pay an entrance fee and monthly fees that cover independent living and a specified number of days of assisted living or nursing care per year at no additional cost. Beyond the specified days additional care is available at a discounted rate below the standard market rate. This contract offers some protection against care costs but not as comprehensive as a Type A contract.
- Type C — Fee-for-service contract — residents pay an entrance fee and monthly fees that cover independent living. Assisted living and nursing care are available on the campus but are charged at the standard market rate when needed. This type of contract has the lowest entrance and monthly fees but provides the least financial protection against future care costs.
- Rental contract — some CCRCs offer rental arrangements with no entrance fee and monthly fees that cover services used. This option requires less upfront investment but may not include the same guarantees of care as entrance fee contracts.
The entrance fee
Most CCRCs require a substantial entrance fee — sometimes called a buy-in — when a resident moves in. Entrance fees vary enormously depending on the location, the size of the unit, the type of contract, and the amenities offered. Entrance fees commonly range from $100,000 to $1,000,000 or more for larger units in upscale communities.
An important consideration when evaluating entrance fees is the refund policy. CCRC contracts vary in how much of the entrance fee is refundable and under what circumstances:
- Fully refundable — the full entrance fee is returned to the resident or their estate when they leave the community or die. These contracts typically have higher entrance fees.
- Partially refundable — a specified percentage of the entrance fee is refundable. The refundable percentage may decline over time during an initial period.
- Non-refundable — the entrance fee is not refunded. These contracts typically have lower entrance fees.
Understanding the refund policy is critical when evaluating a CCRC contract especially for residents who may want to leave the community or whose heirs are counting on an inheritance.
Monthly fees
In addition to the entrance fee CCRC residents pay monthly fees that cover the cost of their unit, amenities, services, and depending on the contract type some or all of their care needs. Monthly fees vary widely but commonly range from $2,000 to $6,000 or more per month for independent living depending on the community and the unit size.
Monthly fees typically cover:
- Housing and utilities
- One or more daily meals
- Housekeeping and laundry services
- Transportation
- Access to amenities such as fitness centers, pools, and common areas
- Social and recreational programming
- Basic health monitoring services
Monthly fees can increase over time so it is important to understand the community’s history of fee increases and what factors drive increases.
Financial stability of the CCRC
Because CCRCs require a significant financial commitment — often the largest financial transaction an older adult will make — evaluating the financial stability of the community before signing a contract is essential. Steps to evaluate financial stability include:
- Request and review the CCRC’s audited financial statements for the past three years
- Look for indicators of financial health including adequate reserves, manageable debt levels, and stable occupancy rates
- Check whether the CCRC is accredited by the Commission on Accreditation of Rehabilitation Facilities — CARF — which evaluates CCRCs against quality standards
- Research whether the community has experienced financial difficulties, ownership changes, or regulatory issues
- Consult with a financial advisor or attorney who has experience reviewing CCRC contracts before signing
Regulation of CCRCs
CCRCs are regulated at the state level and the extent of regulation varies significantly from state to state. Some states have comprehensive licensing and oversight requirements for CCRCs including financial disclosure requirements and consumer protections. Others have minimal regulation.
Before choosing a CCRC find out what regulatory oversight exists in your state and review any inspection reports or regulatory actions related to the community.
Is a CCRC right for you
A CCRC may be worth considering for older adults who:
- Want the security of knowing that future care needs will be met on the same campus
- Value an active community lifestyle with built-in social opportunities and amenities
- Want to avoid the stress of multiple moves as care needs increase
- Have sufficient financial resources to meet the entrance fee and monthly fee requirements
- Want to simplify long term care planning by securing future care in advance
A CCRC may not be the right choice for people who:
- Have limited financial resources
- Prefer to remain in their own home
- Are not ready for a community living environment
- Have family members who will provide care as needs increase
Key terms to know
- Continuing care retirement community — CCRC — a senior living community offering multiple levels of care on a single campus
- Life plan community — another term for a CCRC
- Entrance fee — a large upfront payment required by most CCRCs when a resident moves in
- Type A contract — a CCRC contract that covers all levels of care at little or no additional cost
- Type B contract — a CCRC contract that covers a specified amount of care at no additional cost with additional care available at a discounted rate
- Type C contract — a CCRC contract that covers independent living with higher levels of care available at market rates
- CARF — Commission on Accreditation of Rehabilitation Facilities, an organization that accredits CCRCs against quality standards
- Refundable entrance fee — an entrance fee that is returned in whole or in part when the resident leaves the community
Sources
- LeadingAge — leadingage.org
- Commission on Accreditation of Rehabilitation Facilities — carf.org
- Consumer Financial Protection Bureau — consumerfinance.gov
- USA.gov — Eldercare
This article is for general informational purposes only and does not constitute legal or financial advice. CCRC regulations and contract terms vary by state and community. Consult a licensed attorney and financial advisor before signing a CCRC contract.