CCRCs offer a continuum of care for the duration of one’s retirement – from independent living to assisted living to skilled nursing.
Continuing Care Retirement Communities (CCRCs) provide their services all on one campus or in one community and couples/partners have the benefit of staying close to one another, regardless of the level of care needed. Typically, residents begin in a private townhome or villa setting and move into an apartment or other type of accommodation over time.
The financial strength of the CCRC is critical, due to its obligation to provide housing, healthcare and other services to its residents for the rest of their lives. CCRCs are financially complex and often incorporate actuarial principles into their pricing methodology.
Based on 2015 data, the national average entrance fee is $282,230 and the national average monthly fee is $2,8741. There is enormous variability in entrance fees, and they have been seen in excess of $1.5 million2<s. The size of the monthly fees and the structure of the fees will vary among communities. Some communities will establish the fee when you move in, and that fee will only be subject to annual cost of living adjustments no matter what phase you are in. Other communities may have a graduated fee schedule based on the phase (independent, assisted living or skilled nursing). It is important that you clearly understand the fee schedule of any community you are considering.
Additionally, entrance fees and monthly fees vary depending on type of contract, geographic location, and size or type of residence chosen. Many CCRCs offer some degree of repayment of the entrance fee if a resident moves out or dies. CCRCs have detailed, multi-tier contracts and should be reviewed by a skilled attorney before making a commitment. The IRS, under Section 213 of the Internal Revenue Code, may recognize a percentage of both the entrance fee and the monthly service fee as a prepaid medical expense deduction.
Long-term Care Coverage
While policies may differ, long-term care insurance may pay for a portion of the monthly fee when you are in assisted living or skilled nursing care as long as you meet any other requirements of the policy. The entrance fees and the monthly fees for independent living are not covered by long-term care insurance.
Often couples find themselves in a situation where one spouse becomes a caregiver for the other. In a CCRC, couples can receive individualized care, while still living within close proximity of each other (e.g., on the same campus).
CCRCs provide 24-hour security, social and recreational activities, attractive dining options, housekeeping, transportation, wellness and fitness programs, and potential lifestyle amenities.
Every level of care is offered, from independent through skilled nursing care. The resident usually must be able to live at an independent level of care at the time he or she moves in. As a resident’s healthcare needs change, assisted living and skilled nursing care are available.