Many seniors would most prefer to stay in their homes. However, as they age, other options may become necessary.
Continuing-care retirement communities (CCRC) are billed as ideal. You can start off in an apartment or condominium and move on to assisted living and if required, a skilled nursing care unit. CCRCs offer a lot of promise, but they come with a hefty price tag. It's common for entrance fees to be upward of $275,000 on average, and monthly fees can be $2,000 and up.
Here's what you need to know before investing your retirement dollars.
Understand the ABCs
The first thing to know, says attorney Terence O'Malley, an attorney with GlynnDevins, a marketing firm specializing in the senior market, is to understand that CCRCs may be non-profit or for profit, single-site or multi-site, religious-affiliated or nonsectarian, self-managed or third-party managed, and there are usually multiple types of contracts within one community.
There are generally three types of contracts. He explains that an extensive or all inclusive, Type A contract, covers all costs for the resident, including housing, residential services, amenities, and unlimited access to both assisted living and skilled nursing, with little or no increase in periodic fees, except to cover normal operation costs and inflation adjustments. You can expect to pay an upfront fee (entrance fee) and periodic fees. Type A contracts are also referred to as life-care contracts.
Modified, or Type B contracts, include housing, residential services, amenities, and a specific amount of access to either assisted living, skilled nursing, or both, with little or no increase in periodic fees, except for normal operation costs and inflation adjustments. After the specified amount of access to assisted living and/or skilled nursing is met, the contract will typically require the resident to pay an increased periodic fee to cover the difference in the current level of care, above the periodic fees for independent living, he says. For these contracts, a resident typically pays an upfront fee and periodic fees (usually paid monthly), he says.
Fee-for-service, or Type C contracts, include housing, residential services, and amenities. Access to skilled nursing and assisted living is guaranteed, or provided on a priority basis, but the resident pays the full per diem rates if a change in the level of care occurs. For these contracts, says O'Malley, a resident typically pays an upfront fee and periodic fees (usually monthly).
On the other hand, rental contracts usually only require monthly rental payments, without an upfront entry fee. The resident pays monthly market rates for healthcare, if needed. Under the rental contract, the provider does not guarantee access to healthcare, points out O'Malley.
In equity agreement contracts, the resident actually purchases real estate or shares in the CCRC, usually in the form of a cooperative or condo.
Ask many, many questions
This is not a time to plunk down money without much thought. Be sure, very sure in fact, about what you're getting.
Inquire about all charges and exactly what they cover. Price is a main consideration. “For example, if an elder goes there for help with bathing and dressing, each of those will be for an additional monthly charge called, 'care points' in some facilities. They can add up. Some residents are in assisted living paying as much as $12,000 a month,” says Carolyn Rosenblatt, a RN-attorney, who is a consultant at AgingParents.com.
Simply put, ask questions until you're nauseous. You want to know about staff training, especially if the facility is being considered for a person with dementia. “This is a hard diagnosis to manage and poorly trained staff make it risky to place a loved one there,” says Rosenblatt.
O'Malley has tons of questions, including, “What happens if I need care that is not available in the community's facilities? What are the options? Who decides? Who pays? If I select one plan, can I switch to another at a later date? Under what circumstances? Is there a time limit or other conditions imposed on refunds? What is the community's history of price increases? Under what circumstances can the community terminate my agreement? Are there financial disclosure documents available for review?”
Leave nothing to chance. “Find out what their policy is for bringing in outside agencies, such as home care services or a private duty nurse to help you,” advises Anthony Cirillo, a healthcare consultant and author of Who Moved My Dentures?
Check out the quality of meals, and even whether residents are required to eat at a certain time. Is transportation to doctor's appointments available and how much social activities are there?
Find out the size and type of living quarters, maintenance and housekeeping responsibilities, furnishings and whether utilities are included, advises Cirillo.
Make sure you are clear on all the fine print. Most CCRCs have “benevolence” clauses in their contracts when residents choose the Life Care option, says O'Malley. This means the resident has a home for life. However, it may mean that the resident's entrance fee could be used to continue paying for services if the resident is otherwise bereft of funds. “It is a good idea to explore this concept with the CCRC to ensure the resident understands this. The entrance fee has the effect of estate preservation, but that purpose is defeated if the money goes toward monthly service fees. Most communities tailor plans to fit a resident's financial resources. No community wants its residents to run out of money.”
Is a CCRC a good fit? “Not everyone is successful or happy in a CCRC – it depends on personality, financial resources and the quality of the choices available,” says Rosenblatt.
Once you've found a place, don't think your work is over. “Do not think that once your elder is in a CCRC that they do not need your attention or supervision. No facility is perfect. Speak up about any concerns you have and document who received the information. Follow up yourself to be sure needed changes are made,” says Rosenblatt.
Do not blindly sign contracts without thorough examination. “They can be tricky. See an attorney for advice if you're not sure of whether to sign,” says Rosenblatt.
Mostly though, families need to talk about end of life issues early. Says Rosenblatt, “Most of us are going to need help of some kind. We need to plan for it, anticipate what to do ahead of time and save ourselves a lot of stress and anxiety by getting the information we need.”