BROWN & BROWN, P.C.
COUNSELLORS-AT-LAW
110 GREAT ROAD
BEDFORD, MASSACHUSETTS 01730
781-275-7267
www.brown-brown-pc.com
Since 1925
Continuing Care Retirement Communities (CCRC’s)
Offer Rewards, Risks
Housing options for seniors have expanded dramatically since the days when elders only had a
choice between their own home or the nursing home. In particular, Continuing Care Retirement
Communities (often called CCRCs) have grown in popularity over the last twenty years and for
good reason. CCRCs appeal to seniors and their families because they afford residents the
opportunity to “age in place” by offering multiple levels of care in one campus-like location. But
the decision to live in a CCRC is not to be made lightly – in most cases, once you choose to live in
a CCRC, you have committed to making the CCRC your home for the rest of your life. Even
though many CCRCs are run by non-profit organizations, and despite the fact that nearly all of the
communities provide an exceptional level of care, they are a very expensive investment that should
be weighed carefully with the assistance of family members, a financial planner and an attorney.
Here are some helpful facts about CCRCs and some reasons why you should call Brown & Brown,
PC before signing any agreement with a CCRC.
CCRCs Provide A Range of Housing Choices and Other Services
CCRCs are popular because they offer a wide range of services that fit seniors’ needs. A typical
CCRC has three levels of living arrangements which are usually utilized in order. The first level is
completely independent living in an apartment, townhouse or cottage setting. These units do not
differ from any other type of rental housing that anyone could access in his or her community
(except that they usually have special features to make getting around easier and they are typically
in much better condition). The second level is assisted living, which usually takes the form of a
private apartment in a building with shared services and access to caregivers. The third level is a
skilled, long-term nursing care unit, which looks and feels a lot like a nursing home, albeit a more
luxurious one. When seniors enter the CCRC, they will typically move into an independent living
unit where they may live for the rest of their lives. If a resident requires additional care due to
accident or illness, the assisted living and long-term care facilities are available and the resident is
entitled to move into those units if and when the need arises. Since CCRCs are designed with this
progression in mind, they are typically interested in having seniors move in when they are younger
and healthier, which benefits the active senior and the community as a whole.
Payment Often Includes an Entrance Fee and Monthly Payments
Tiered living is one feature that sets CCRCs apart from other types of senior living – the other
main difference between CCRCs and other types of housing is the way that seniors pay for
services in the community. Most CCRCs require their new residents to pay a one-time fee, called
an entrance fee, when they first move into the community. This fee can range from tens of
thousands of dollars up to close to a million dollars, depending on the type of facility and the
quality of care provided. The entrance fee is almost never completely refundable – in
Massachusetts, a typical CCRC will refund 90% of a senior’s entrance fee if he or she moves out
of the community or if he or she passes away. (However, under Massachusetts law, the facility
can reduce the amount of the refund by 1% per month of residence, so if a senior moves into a
CCRC in January 2011 and he moves out in January 2013, the facility, by law, could choose to
only refund 76% of his entrance fee – 100% minus 24%, one percent for each month. It is unclear
if any Massachusetts CCRCs actually reduce their deposits in this manner.)
On top of the entrance fee, seniors must also pay a monthly fee to the CCRC, which usually comes
to at least several thousand dollars a month. Depending on the contract, this fee could remain the
same no matter what type of unit the senior lives in and no matter what kind of services he receives
(this is usually the most expensive option), or the monthly fee could change dramatically if the
senior requires more intensive services in an assisted living or skilled-nursing unit. In some cases,
the monthly fee only covers the senior’s physical housing – all other services are charged based on
use.
Take Care Before Making The Move to a CCRC
CCRCs provide seniors with attractive options – tiered housing, services tailored to their needs,
and the comfort of knowing that they will live in the same community for the rest of their lives.
Most Massachusetts CCRCs are vibrant, dynamic communities with great staffs, interesting
programming, and waiting lists to get in. However, the extensive and confusing (even for some
attorneys) CCRC residence contracts contain some very important drawbacks. For instance, some
communities reserve the right to tell the senior when it is time for him or her to move into a new
level of care. Other communities can force seniors to move out of the community entirely if their
behavior does not meet “community standards” (this often happens with people suffering from
dementia).
The fees for services in CCRCs are frequently hard to understand, especially when expressed in
contractual language. Seniors often believe that their monthly fee will not increase, no matter what
services they need, when in fact the opposite is sometimes true. (These misunderstandings do not
come about because of any improper action by the CCRC’s staff, but usually because all of the
parties involved do not take enough time to thoroughly review the contract). Others think that they
will be able to obtain personal care assistance from CCRC employees in their independent living
units without incurring additional fees, when in most cases their monthly fee only covers personal
care service in the assisted living unit. Then there is the issue of what happens when a senior runs
out of money when living in the CCRC – potential applicants need to ask if the facility will accept
Medicaid for skilled nursing care and they also need to know if the entrance fee is available to be
applied towards the cost of care if a they run out of savings. Forward-thinking residents should
also understand the effect of their entrance fee on a potential Medicaid application.
The CCRC contract addresses all of these issues, but the actual contract document is often
incredibly long and complex. Yet despite the complexity, in many cases, potential residents don’t
speak with their attorney before signing up to live in a CCRC and paying a hefty entrance fee. As
with any other transaction where hundreds of thousands of dollars are changing hands and your
rights can be severely curtailed, it is imperative to carefully review a CCRC contract, and the
CCRC’s financial statements, with a qualified attorney before making the decision to move into a
CCRC. The attorneys at Brown & Brown, PC can help you to understand the CCRC contract and
will make suggestions for changes that will protect you. If you are thinking about living in a
CCRC, if you are getting ready to sign a CCRC residence contract, or if you are worried about
qualifying for Medicaid long-term care coverage, give us a call to discuss your rights and options
today.