Given the recent ups and downs in the investment markets, and all of the changes in the long-term care insurance (LTCI) industry, signing up for a continuing care retirement community (CCRC) may seem like an increasingly attractive way to manage long-term care (LTC) risk.
A CCRC is a campus that gives a consumer the ability to start out living in an ordinary apartment or single-family home, then move into an assisted living facility or nursing home unit if the consumer ends up needing LTC services.
The richest CCRC “life care” contracts provide what amounts to a promise of access to prepaid LTC services. The consumer may pay hundreds of thousands of dollars for a residential unit purchase agreement, along with monthly fees of thousands of dollars per month. The richest life care contracts will then keep the base monthly fee the same if the consumer moves into an LTC unit. In theory, the consumer with that kind of contract pays a high price for housing and homemaking services, but gets the LTC services thrown in for free. Some CCRCs go a step further: They offer consumers who qualify for life care guarantees, and pay for the option, a promise of access to care for life, even if the consumers end up losing their assets.
Of course, some CCRCs keep their promises better than others.
In many cases, “CCRCs are not as they appear in the glitzy marketing!” Bett Martinez (photo, right), an insurance agent and consultant in Albany, Calif., writes in her consumer LTC planning guide, “We’ll Face That When We Have To… P.S. It’s Later Than You Think!”
Martinez uses client anecdotes to explore the kinds of risks she believes potential CCRC residents should consider.
Volunteers at the National Continuing Care Residents Association (NaCCRA) give their own take on risks prospective CCRC residents ought to understand in a guide they prepared.
For a look at five issues for CCRC prospects to ponder, drawn from the Martinez book and the NaCCRA guide, read on.
Some CCRCs offer continuing care at home (CCAH) options that can keep clients out in the general community as long as possible. Some traditional, campus-based CCRCs have good architecture and interior design. But the buildings in some traditional, campus-based CCRCs still go heavy on the brocade and the chandeliers.
People who already need extensive help may have no choice but to live with other people who need help, but people who are still independent may prefer to live out in the community, with people of different ages, rather than in the independent living units on a traditional CCRC campus.
Nonprofit groups set up some CCRCs, but for-profit corporations set up others. Given how high the entrance fees and monthly fees can be, residents may feel as if a lot of money they are spending is going to the corporate managers and investors.