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CCRC Contracts Part 2
Jan L. Warner & Jan Collins

“When Mom and Dad became unable to speak for themselves, no one seemed to know about the ‘perpetual care’ they were so sure they had bought. . . . In addition to a $200,000 non-refundable deposit, their monthly fees had increased from just under $2,000 to more than $6,000 in six years. . . . Since we don’t hold out any hope that there is anything we can do, we hope you will print this letter so your readers will know that seniors are getting rooked every day, and it is best not to be too proud to seek help from children who care.”

Continuing care residential communities (CCRCs) promise their residents not only housing and meals for life, but also various care services -- including medical and nursing care when required. Other services may include social activities, housekeeping, hair and beauty services, and transportation, but all should be listed specifically in the contract.

CCRCs may be for profit or affiliated with religious or membership organizations. Most require prospective residents to undergo not only medical assessments to evaluate their physical and mental status before admission, but also financial examinations to ensure that potential residents can afford to pay the entry fee and monthly payments. Because CCRCs profit from turnover of their housing units, many do not accept residents under a certain age. When residents become disabled, appropriate nursing, health, and personal assistance is available.

Because CCRCs are in business to provide care for life, to cover expenses, and to make a profit, there are concurrent -- and continuing -- financial commitments required of the resident. For example, most CCRCs require residents to pay a one-time entry fee along with monthly payments for services that should be specifically delineated in the continuing care contract. Depending on where you live and the type of community desired, entry fees will vary, but will probably be in the five- and six-figure range. Monthly fees will also vary depending on the type of service. As residents require more assistance, most CCRCs increase their monthly fees, although some provide health care benefits at no additional charge.

While CCRCs offer many qualify-of-life benefits, independence, and access to health care so long as you can pay for it, we know of none that will agree, in writing, to provide health care for the rest of your life – even if you run out of money.

In some states, there is a “cooling off” period after the contract is signed during which the resident can cancel the contract without penalty. In this case, all deposits must be refunded. In other states, life care contracts are regulated by state law, which affords more protection to seniors.

Whether the entry fee is refundable, in whole or in part, at the death of a resident is treated differently in different contracts. In some states, a pro-rata part of the entry fee is repaid in some fashion depending on the length of time the resident lived at the CCRC.

The number of CCRCs has grown along with the number of seniors, and a rather small percentage has been accredited by a private, nonprofit entity known as the Continuing Care Accreditation Commission, founded in 1985. CCAC merged with The Commission on Accreditation of Rehabilitation on Jan. 31, 2003, and information can be found at CARF.ORG. While accreditation is important, there are a number of other factors that should be considered, including the policy on entry fee refunds, what services are provided without additional charge, the cost of assistance and health care services if needed, staffing ratios, and the financial condition of the CCRC.
Next Week: Navigating the CCRC Contract.

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     Related Resources

  • Continuing Care Neighborhoods Need Careful Examination

  • Continuing Care Agreements, cont'd.

  • CCRC Contractual Pitfalls

  • CCRC Part 3-Contracts

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