Acquiring continuing care—in a community setting—requires a major financial investment by both the consumer and the provider. For the consumer, doing so may involve spending most or all of a lifetime of savings; and for the provider, delivering promised services during the resident’s stay requires sound financial and actuarial management. The following will assist consumers or potential residents in considering Continuing Care Retirement Communities (CCRC).
Continuing Care Retirement Communities Defined
Dedicated to adults who are usually, at least, 55-years old, CCRCs—sometimes referred to as a “lifecare” communities—combine living accommodations, and continuing care, including health-care provisions. As a resident’s age and needs increase, the CCRC must increase the service it provides to the resident.
When a CCRC provides continuing care, the care will progress or increase as the resident’s needs increase. Continuing care may include one or more of the following components:
A. Independent Living — A living unit chosen by the resident for his or her exclusive use, in which the resident can live and function independently.
B. Assisted Living or Personal Care — Should a resident require assistance or supervision with one or more activities of daily living, then, depending on the facility and the degree of care needed, assistance to a resident may be given in a variety of settings. Possibilities include: (1) assistance in the resident’s living unit, (2) transfer to a residential health care unit which is located within the community, and (3) transfer to a designated supervised unit specifically reserved by the provider for assisted living within the community.
C. Long Term Care or Nursing Home — When a resident can no longer function independently and requires constant supervision or care, that care will be provided in a long term care facility, commonly known as a nursing home.
Potential residents should find out which components a CCRC offers, as well as how the CCRC defines, manages, and charges for the components. The CCRC must disclose and detail that information in a Disclosure Statement, and in the Contract.
Residents must enter into a contract with the CCRC, agreeing to purchase service and the right to live in a specific unit: Unlike Adult Retirement Communities, it is not an agreement to lease or purchase property. Thus, if the resident meets the CCRC’s health and financial requirements, it will provide continuing care for the resident’s lifetime, if the resident desires.
Continuing Care Offered Through Different Plans
A CCRC will offer continuing care through three basic contract plans, described as follows:
A. The All-Inclusive Plan — The fees in this plan pay for shelter, residential services, and amenities; and long-term nursing care, as needed, at no additional cost, except for adjustments of operating costs due to inflation. There are some slight variations among facilities, but, generally, in an All-Inclusive plan the health care costs are paid through all of the fees paid to the facility by all of the residents, regardless of individual resident needs.
B. The Modified Plan — This plan also includes shelter, residential services, and amenities. However, this plan covers only a portion of health care offered, usually for a specified time in the long-term facility (nursing home). After the specified time, the resident who needs the care pays for it at an additional charge, or the resident will pay for the health care at a fee which is less than the fee charged to non-residents.
C. Fee-for-Service Plan — This plan usually includes shelter, residential services and amenities, and sometimes emergency health care. It usually guarantees access to long-term care, but the resident who receives care will pay for it as an additional cost. Monthly fees vary according to the type of plan, size of the living unit, number of occupants, and number of services included in the contract.
The fees a resident pays will vary according to the type of plan, size of the living unit, number of occupants, and number of services included in the contract.
To access the CCRC’s living accommodations and other services, a resident must, typically, pay three separate fees: the application, entrance, and monthly service fee.
A. An Application Fee — may be nonrefundable and as high as $500, but no greater;
B. An Entrance Fee — is a one-time lump sum of money paid to the CCRC for the occupancy of an independent-living unit, and for the provision of health care.
C. A Monthly Service Fee — is charge that residents pay the provider in return for the services identified in the contract. Because the monthly service fee is subject to inflation, increases in the monthly service fee should be expected.
The State of New Jersey has regulated CCRCs since 1987 through the Continuing Care Retirement Community Regulation and Financial Disclosure Act (N.J.S.A. 52:27D-330 et seq.) The protects consumers by strengthening the CCRC’s long-term financial stability, and by requiring CCRCs to disclose a important information to the consumer before the consumer spends money and signs a contact. The Disclosure Statement describes services, financial stability, fees, and other contract terms. Anyone considering a CCRC may acquire that statement directly from the CCRC.
The New Jersey Department of Community Affairs provides more information about CCRCs in its publication titled: Continuing Care Retirement Communities: A Guide Book for the New Jersey Consumer.