People may find various contract options while researching continuing care retirement communities (CCRC).
Most people will require assisted living support at some time in their lives.
We have witnessed our clients needing such support over the years.
Some choose to move in with family or receive support at home.
Others decide to enter a continuing care retirement community (CCRC).
According to an Elder Tree Care Management Services article, not all communities function the same, even though they all offer a mix of independent living, assisted living, and skilled nursing.
Before signing a contract, it is essential to understand the terms and key elements to secure your personal and financial interests.
Doing your research can help you evaluate whether certain continuing care retirement communities might be a good fit.
Most CCRCs offer one or more of the top three most common contract types.
What are these contracts?
Extensive or Life Care Contracts.
This type of contract relies on larger payments being made upfront.
The services covered in these contracts are broad over a long period.
Life care contracts tend to have minimal additional expenses due to the increased need for comprehensive care.
Modified Contracts.
While these contracts have an upfront entrance fee, their offerings for skilled nursing or assisted living are more limited.
As residents reach the predefined limits, these seniors may be required to pay higher monthly costs for continued care.
Fee-for-Service Contracts.
Entrance fees are generally lower, and flexibility is greater for these contracts.
When the costs arise, the expenses are paid by the senior.
If additional care is necessary, the expenses may be significant.
Weighing the pros and cons against your health needs and financial situation and asking questions about the contract coverage details enables you to make an informed decision regarding continuing care retirement communities.
Most CCRC contracts have entrance fees.
These initial fees are a large portion of the financial investment for continuing care retirement communities.
Depending on the level of care include in the contract, the fees can vary from tens of thousands to hundreds of thousands of dollars.
In addition to the initial fee, seniors will have monthly fees for daily costs like housekeeping, meals, and social activities.
Various factors like inflation may require an increase in fees over time.
Because CCRC fees and contracts are not standardized, one should seek clarity on what is covered before entering into a contract.
Some communities will bill basic healthcare services separately, while others will include them in the initial or monthly fees.
In addition to what is included in the fees, one should understand the refund policy before signing a contract.
Some contracts allow for refunds on entrance fees for those residents who die or leave the community during a specific period.
Continuing care retirement communities are beneficial because they provide a variety of services within a single place.
Because this does not look identical for all communities, you should ask questions about the types of healthcare services available onsite, how transfers between the various levels of care are handled by the community, and the threshold and criteria used to determine when a resident is transferred to a different level of care.
These answers can help minimize disruptions of unexpected transfers.
It is good to choose a community with policies that align with your needs and preferences.
Because the communities demanded a significant financial commitment, you should evaluate how economically stable the facility is before entering into a contract.
The CCRC should have transparent financial reporting and a solid financial foundation.
Where can you find this information?
You can look at annual financial statements or seek answers through third-party rating agencies.
Those with a solid financial foundation and history are more likely to maintain their facility, services, and quality of care.
In addition to looking at the financial security of the community, it can be beneficial to review how the CCRC has addressed past financial challenges and managed its past fee increases.
Such information gives a picture of community longevity and cost stability.
When people enter into contracts with a continuing care retirement community, they do so without being able to predict how life circumstances may change.
Rapid health decline or a desire to live closer to family may all be why a senior leaves the community.
To understand the flexibility and options available to you should life changes or new priorities require you to leave the CCRC, you can review the termination clauses of the contract.
These sections should outline in detail the conditions for exiting the community and any penalties associated with the termination.
Because some contracts will offer partial refunds of entrance fees and others will require these fees to be forfeited, it is important to understand the terms of your refund policy to help you address possible financial liabilities.
As you search for a continuing care retirement community to meet your needs, you have every right to ask questions and receive clear answers.
Key questions to ask include what is specifically covered by entrance and monthly fees, how fee increases are determined, how the CCRC has handled fee increases in the past, how transfer policies impact living arrangements, and what the costs and options are for moving out or ending the contract.
Entering into a contract with a CCRC demands comprehending financial and legal implications.
Often, the terms and phrasing are complex.
In addition to continuing care retirement communities, there are other options available to prepare for your future in retirement, including long-term care insurance, incapacity planning, and estate planning.
The types of contracts available and their specific terms vary among communities.
As such, it is critical to assess financial commitments, levels of care, fee coverages, and transfer or termination policies.
Seniors generally cannot afford instability in retirement, so it is important to select a CCRC with financial and operational security.
When it comes to selecting a continuing care retirement community, knowledge is power.
This post is for informational purposes only and does not provide legal advice. You should contact an attorney for advice concerning any particular issue or problem. Nothing herein creates an attorney-client relationship between Harvest Law KC and the reader.
Reference: Elder Tree Care Management Systems (2023) “The Enigma of Continuing Care Retirement Communities (CCRC)”
REMEMBER: “The choice of a lawyer is an important decision and should not be based solely upon advertisements.”
This statement is required by rule of the Supreme Court of Missouri.
