Elder Care: Retirement Communities Text Size:

Continuing care retirement communities provide several levels of elderly care for either an extended period of time or a lifetime. Although expensive, they can provide peace of mind to the resident and the resident's family who know that that the resident will have a safe place to live and will receive appropriate care for life.

Three Levels of Care

A continuing care retirement community (CCRC), also known as a life care community, provides three different levels of care that allow elderly residents to "age in place" and to remain residents until death. The levels of care include:

• Independent living where residents live in specially designed apartments or homes so that they may maintain active lifestyles
• Assisted living where residents maintain some measure of independence but receive assistance in the activities of daily living such as bathing, grooming, dressing and eating
• Skilled nursing care where residents require ventilator services, intravenous medications, skilled health monitoring and other nursing care services

Continuing Care Contracts

Generally, there are three types of continuing care contracts: extensive, modified, and fee-for-service.

• In an extensive contract, the resident receives the full range of services including shelter, residential services with amenities, assisted living and long-term nursing care
• In a modified contract, the resident receives shelter and residential services with amenities but only limited assisted living and nursing care services. Additional nursing services are paid on a fee-for-service basis
• In a fee-for-service contract, the resident receives shelter and residential services, but all amenities, assisted living and nursing services are paid on a fee-for-service basis

Continuing care or life care contracts are expensive lifetime agreements and they are valid, even though the provider might receive a huge profit if the resident dies shortly after paying the entrance fee. Contracts may provide for increases in the monthly fees, and residents may be evicted for failing to pay them. Residents may also lose their assets if the provider becomes insolvent. Further, once admitted into a CCRC, a resident may lose the ability to pick up and move elsewhere.

Evaluating a CCRC and Continuing Care Contract

Because the financial risks to residents are serious, a CCRC and the continuing care contract should be carefully evaluated. Questions to ask include:

• Is the provider licensed with the state and is the CCRC accredited?
• How long has the provider operated the CCRC?
• Is the provider required to maintain a certain level of financial reserves and escrow accounts?
• Does the provider readily disclose information on its financial assets and liabilities and its actuarial soundness?
• Does the CCRC provide all three levels of care? What other services or activities are offered to residents at the complex? What services are provided outside of the complex?
• What is the number of units or beds that are available for each level of care and what is the percentage of occupancy in each level?
• What are the entrance requirements for residents?
• What is the amount of any deposit or entrance fee required? Is it held in escrow? Is it refundable to the resident or the resident's estate? If so, under what circumstances?
• What are the currently monthly fees? How often have fees increased in the past and what was the amount of each increase? What future rate increases are planned?
• Do monthly rates increase if the resident moves to a different level of care?
• Is the CCRC certified to receive Medicaid reimbursements?
• Does the resident or the provider have a right to terminate the contract? If so, when can the contract be terminated?
• What are the procedures for moving a resident from one level of care to the next? Who makes the decision to move the resident? Can the resident refuse to move or appeal the decision?
• What arrangements are made if both spouses are residents but they require different levels of care?
• Under what circumstances can a resident be evicted? Can the eviction be challenged? If evicted, can the resident obtain a refund?
• Is the resident required to have Medicare? Medicare supplemental insurance? Long-term care insurance?
• How do residents participate in the management of the CCRC?

Questions for Your Attorney

• What levels of care are available in a continuing care retirement community?
• Can I pay for services as needed in a continuing care retirement community?
• What kinds of questions should I ask in deciding whether to put a loved one in a retirement community?

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