Continuing Care Retirement Communities
- CCRC Checklist
- CCRC Residency Qualifications
- CCRC Services
- Choosing CCRC
- Payment Options
The typical Continuing Care Retirement Community (CCRC) is a community complex consisting of apartments, cottages or combinations of residential independent and group living units, a health care facility, and other amenities, usually combined in one central location. The CCRC provides services that may include housekeeping, dining rooms, recreation areas and miscellaneous service shops, and, in some cases, local transportation. The facility is also often a licensed home for adults and licensed nursing facility. Continuing care retirement communities provide the above mentioned services, under an agreement effective for a period greater than one year, and subsequent to payment of an entrance fee.
Is a CCRC right for you?
Most people only consider a retirement facility after healthcare or household management needs have become problematic. Many could benefit from some of the positive aspects of retirement living sooner. It might be worth considering senior living options as part of your overall retirement and healthcare planning, rather than thinking of it as a last resort. CCRCs address a major concern for older people, namely, how they will get continuing care if their health fails. For couples, if one partner has to be confined to the nursing unit, the other can continue to stay conveniently nearby in the CCRC.
Additionally, many elderly individuals regard a CCRC as a way of relinquishing those duties associated in the upkeep of an owned house or rented apartment. The CCRC usually provides all maintenance for the residential units, including the grounds, does housekeeping and (some) laundry, pays for all utilities (excluding the telephone) and provides security services.
A CCRC is generally available to and populated by those individuals who are aged 65 and over. CCRCs provide an environment where older adults can share common interests and activities.
Virginia's Continuing Care Provider Registration and Disclosure Act (Code of Virginia 38.2-4900 et seq.) defines a continuing care retirement community as a place in which a person undertakes to provide continuing care to an individual. Continuing care is defined as providing or committing to provide board, lodging and nursing services to an individual, other than an individual related by blood or marriage, (i) pursuant to an agreement effective for the life of an individual or for a period in excess of one year, including mutually terminable contracts, and (ii) in consideration of the payment of an entrance fee. Continuing care is also defined as providing or committing to provide lodging to an individual, other than an individual related by blood or marriage, (i) pursuant to an agreement effective for the life of the individual or for a period in excess of one year, including mutually terminable contracts, (ii) in consideration of a payment of an entrance fee, and (iii) where board and nursing service are made available to the resident by the provider, either directly or indirectly through affiliated persons, or through contractual arrangements, whether or not such services are specifically offered in the agreement for lodging.
There are several types of retirement communities which may resemble a CCRC. When in doubt, be sure the community you are considering meets the terms of the Virginia Code quoted above. Choosing to enter a CCRC can involve a significant financial decision. A CCRC registered with the State Corporation Commission must file an annual financial disclosure statement, and is subject to regulation under the Continuing Care Provider Registration and Disclosure Act, which sets regulatory requirements which govern the financial stability of the CCRC. This provides a measure of protection for the consumer's investment.
Regulations Governing CCRCs
The State Code of Virginia through the Continuing Care Provider Registration and Disclosure Act (38.2-4900) requires CCRCs to provide the prospective buyer with full disclosure statements of their operations and all terms of agreements made between prospective residents and the provider. The State Corporation Commission enforces CCRC regulations governing financial stability, financial disclosure and resident contracts. In addition, CCRCs must also meet state and federal regulations which govern the levels of long-term care they provide. Specifically, the Department of Social Services licenses portions of the CCRC in which personal care services are provided under Virginia's Home for Adults law and can be reached at 703-934-1505. Their website is http://www.dss.virginia.gov. The Virginia Department of Health (VDH) licenses the nursing facility section, and home health care services through their Office of Licensure and Certification. They can be reached at 1-800-955-1819 or 1-800-367-2100. The VDH website is http://www.vdh.state.va.us/olc.
What services are generally provided by CCRCs?
As a resident ages it is the intent of a CCRC to meet a resident's basic needs including shelter, food and care. The range of services, however, offered by CCRCs is not standardized throughout the industry. Services offered may vary from one CCRC to another and so may the extent to which services offered are fully (or partly) covered by the regular fees.
Available health care services also vary from community to community. Some communities offer unlimited care at no additional cost, while others involve fee-for-service and/or deductibles. Home health services for independent living residents may or may not be included in the contractual agreement. See the CCRC Checklist included in this section for questions to ask about the services provided.
Paying for CCRC Services
Continuing care retirement communities vary widely in the way in which residents are required to pay for the care they need. The American Association of Homes for the Aging identifies three basic types of CCRCs:
- Type A communities are comprehensive. Residents are guaranteed housing, food, personal care services, and access to needed nursing care at no additional cost, and charitable funds may be available to allow those whose financial resources are exhausted to continue to receive the care they need.
- Type B or modified communities offer the same services as the Type A community but charges will increase when nursing care is needed beyond a certain period of time, that is, for more than a set number of days per year. If the resident is unable to pay for the needed care, the community is no longer obligated to provide the care.
- Type C communities offer a fee-for service arrangement whereby the resident has priority access to nursing care but must pay for the services needed.
A community may offer all three types of arrangements, as well as a month-to-month contract in which the resident pays for the specific services provided and is not guaranteed priority access to additional services.
A CCRC is an investment. When an elderly individual seeks occupancy at a CCRC, a contract is drawn between the CCRC and the prospective resident to define each party's financial and service obligations, which should include termination terms and other relevant conditions. Upon completion of this contract the resident pays a lump sum "entrance fee" prior to or at occupancy and a monthly charge thereafter. (This entrance fee is usually nonrefundable, in all or in part. In some CCRCs certain funds are held in escrow. These funds are part of the entrance fees and are refundable.) Several factors (e.g., size of the living unit taken, CCRC location, and the quality and scope of the services and amenities, construction date and cost, etc.) affect the amount of the entrance fee paid.
According to the Spring/Summer edition of the "Guide to Retirement Living", the entrance fees of Virginia's continuing care retirement communities range from $12,900 to $588,000. In addition, there is the monthly fee ranging from $200 to $6000. If two persons occupy the same living unit, there may be an additional fee per month. (The monthly fees will increase from time to time at the discretion of the CCRC management and according to the contract and generally cover the basic costs of operations.) Some CCRCs offer a "no entrance fee" option. However, eliminating the entrance fee increases the monthly fee.
Qualifications for CCRC Residency
All CCRCs have entrance requirements which a prospective resident must meet. These mainly deal with the applicant's health and financial status. Minimum age (usually 65) and the capacity to live independently are usually basic requirements.
A personal health history and physical examination performed by the applicant's doctor or the CCRC physician is usually required. This information is used by the CCRC to determine the possible future health care needs of the applicant.
An extensive financial disclosure statement must generally be submitted and is subject to verification by the CCRC. The prospective resident may be required to list assets and income by type. From this information the CCRC determines whether or not the applicant has enough income and assets to cover the entrance fee and the monthly service fees (at current rates and at estimated rates as well). Typically the resident must make one additional financial commitment. He must agree to make every effort to preserve and maintain assets and income and to take no action to impair the ability to meet the financial obligation to the CCRC.
Insurance coverage may be required. The applicant may need Medicare Parts A and B or comparable insurance, and perhaps a supplementary health insurance policy and/or long- term care insurance. Residents are responsible for personal property and liability insurance coverage plus auto insurance, if they own cars.
Use this checklist as you consider residency at a Continuing Care Retirement Community. The checklist will help you compare communities you are considering.
Paying for Residency
- Is there an application fee (or a processing fee)? Is it refundable?
- Is there an entrance fee? What is the refund policy with respect to any entrance fee and the conditions for the refund?
- How much will you be expected to pay for the care you receive?
- What health, personal, social and recreational services are covered by the monthly fee?
- What is the community's policy concerning residents who become unable to pay the regular monthly fees?
- Under what conditions/circumstances will the monthly charges be raised? Lowered?
- What type(s) of insurance coverage are required upon entering the CCRC? If supplemental insurance is required, is it available through the CCRC on a group insurance basis or must the resident seek out individual policy insurance? How much is required?
- Have you compared the chosen CCRC with others which offer similar services and contracts to determine if the fees are competitive?
- Under what circumstances can a contract be terminated by the community? By the resident?
- Is a refund available in the event a resident decides to leave the community voluntarily or involuntarily, or dies?
- How are the monthly fees adjusted, if at all, when the resident is transferred to other accommodations within the community, such as the nursing care facility?
- Is a portion of the entrance fee and the monthly fees deductible for income tax purposes as prepaid medical care?
- Is a credit against monthly fees offered for periods of absence while in a hospital or on travel?
The CCRC Organization
- Who owns or sponsors the community? Does the owner and/or sponsor/provider manage the facility? If not, who is the management company? How long have they managed the facility? What other facilities does it manage?
- Who is on the board of directors and what is their responsibility to the community?
- How long has the facility been in operation? What is its current occupancy rate? If the occupancy rate is less than 80%, why? Is there a plan to correct this situation to prevent higher monthly fees?
- Have you met the administrator of the facility?
- What are the admission policies and requirements of the CCRC?
- What is the residents' role in establishing the "rules and policies" of the CCRC? Ask for and receive a copy of them.
- Is the CCRC or any of the related operating parts accredited, certified, and/or regulated by an independent agency? Are they in good standing? Ask what this means to you as a consumer/resident.
- Discuss the community with residents to find out if they are satisfied.
- Discuss the community with its volunteers and staff.
- Ask for and obtain a copy of the most recent government inspection report for any care unit the community maintains.
- Has a Residents' Council been organized to represent the residents in discussions with management? Are copies of the minutes of Resident Council meets available for review by prospective residents?
The Community's Financial Condition
- You are entitled to a copy of the latest Disclosure Statement that was submitted to the State Corporation Commission. Ask for your copy. You may wish to review this information with your accountant or financial advisor.
- Determine the kind and amount of reserves being held by the CCRC. How are they represented on the annual financial audit?
- Under what circumstances may the reserve money be released for use?
- What is the record of past fee increases, both in amount and frequency? How are the sizes of the increases established?
Shelter, Services and Care
- What shelter, services, and care are covered by the terms of the contract?
- What shelter, services, and care are available for additional fees?
- Is the nursing home certified to accept Medicare patients? Medicaid patients?
- What, how and by whom are food services provided?
- What parking areas are provided for residents? Are handicapped parking spaces sufficient? What restrictions on parking are in force?
- What public transportation is available, on what schedule, and how accessible is it to residents?
- How long is the resident's living unit maintained when he or she is transferred to other accommodations within the community?
- Under what circumstances can a resident be transferred within the CCRC? Who determines that a change in the level of care is needed? What involvement does the resident have in this decision?
- For how long and how often will each service be available or provided, as stated in the contract?
- Tour the nursing or health care facilities and meet the nursing director and other staff.
Signing the Contract
- Review the contract and Disclosure Statement with your legal representative.
- Ask any questions you may have about the contract, the CCRC's policies, financial arrangements or other concerns, prior to signing the contract.
Information about CCRCs, including a listing of those CCRCs in Virginia which are registered with the State Corporation Commission, may be obtained by contacting:
Bureau of Insurance
Tyler Building - 1300 East Main Street
Richmond, VA 23219
804-371-9741 or 800-552-7945
(Toll-Free at 1-800-552-3402)