Continuing Care Retirement Communities (CCRC) are a unique option when it comes to long term care. When considering this option you will want to be familiar with how they work.
CCRC’s provide an alternative to other long term care options. Typically residents pay a large entrance deposit, generally between $100,000 and $300,000 and upwards of $1 million. This large deposit buys the resident a guaranteed tiered approach to long term care. CCRC’s provide independent living, assisted living, skilled nursing, and even hospice care as the residents needs change. The deposit will guarantee whatever level of care is needed, although there may be an additional monthly fee. That monthly fee however, is typically a fraction of what that care would be at a non CCRC facility.
Some people may be reluctant to spend such a large sum on the entrance deposit but that deposit is often refunded to the resident’s family upon the resident’s death. This all sounds pretty good right? There are some issues to be aware of when shopping around for a CCRC.
There are 3 types of CCRC contracts:
- Life care – typically the most expensive but this type of contract allows the resident to pay the same monthly fee for the entire range of services offered.
- Modified – generally less expensive upfront than the life care contract, but the resident will pay more per month as health care needs increase.
- Pay for service – most of the time the least expensive option upfront, but the resident will pay all of the health care related expenses.
It is important to know what the deposit pays for and how much the monthly fee will be after the initial deposit.
In addition, there are some other financial considerations to examine before choosing a CCRC. The long term financial health of the CCRC is critical. Think of it this way. You just gave a business the majority of your life’s savings for a lifetime of care. If that business goes bankrupt you will lose your deposit, and have nowhere to live.
Here a few questions to ask so that you can be confident you are making the right decision:
What happens to my deposit upon death? Upon move out? Is it returned in its entirety? Can it be paid to my trust? Does my unit need to be re-occupied before my deposit is returned? What does the long term financial health of the facility look like? Can I see a copy of the facilities audited financial statements? What exactly are the services that my deposit and monthly fee are paying for?
CCRC’s can be a great alternative to traditional long term care, by providing peace of mind and long term security for the residents. However, due to the business model of many of these facilities they do come with certain risk. If you have any concerns about a CCRC contract you are about to sign, do not hesitate to seek assistance from your estate planning and elder law attorney.
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