Once you've made the decision to move into a CCRC, it's important to consult with your attorney and financial advisor to review the agreement for services that are provided or arranged. Entering a contract is usually a once-in-a-lifetime choice, which is the primary reason many seniors opt to live in a CCRC. While they tend to be expensive, CCRCs guarantee lifetime housing and health care services with long-term contracts that detail obligations of the CCRC as well as its costs.
The agreements, or contracts, vary within each community. They typically are comprised as follows:
- Fee-for-service contracts in which you pay full daily rates for long-term nursing care.
- Modified contracts, which include a specified amount of long-term nursing care. Beyond that specified time, you are responsible for payments.
- Extensive contracts, which include unlimited long-term nursing care at little or no increase in the monthly fee.
Most CCRCs require an entrance fee and monthly payments. This is explained in the AAHSA's guidebook:
- Entry fee and monthly fee payments
The one-time, up-front entry fee is combined with monthly fees to cover the living unit, services, and care items specified in your resident agreement. This is the most common type of fee arrangement offered by nonprofit CCRCs. The entry fee may or may not be refundable; if so, it may be only partially refundable.
- Monthly fee only or rental payments
There is no up-front entry fee, and the costs of your living unit, services, and care are covered solely by your monthly fee. For comparable living units, a monthly fee only is likely to be higher than the monthly fee paid under the entry fee plus monthly fee agreements.
- Ownership or equity (condominium, cooperative or membership) payments
These types of CCRC agreements involve the actual purchase of real estate or membership. They are the least common type of agreement, and their values are dependent on the trends in the general real estate market. Ownership agreements have most of the characteristics of property ownership found outside the CCRC industry, with the addition of entry eligibility requirements that affect resale. The service and health care package transactions are generally separate from the purchase transaction.
Finally, while you will need to meet certain financial requirements for entering a CCRC, you should meanwhile also investigate the financial condition of the community. Your financial advisor can help you verify the community's current and long-term financial stability.
To learn more, The Consumer Guide to Understanding Financial Performance and Reporting in Continuing Care Retirement Communities can be downloaded for free in PDF format from the Commission on Accreditation of Rehabilitation Facilities http://www.carf.org/FinancialPerformanceCCRCs.