Is a retirement community right for you?
A CCRC (short for “continuing care retirement community”) is a senior community where residents move between levels of care as they age. This means residents start living independently in their own apartment while taking advantage of the various recreational, dining, social and educational opportunities the community has to offer. As the aging process creates a need for more care, residents will transfer to assisted living and ultimately to skilled nursing or memory support.
Many seniors find it appealing to settle into a community that guarantees a lifelong place to live, even as their care requirements change. But before making the decision, it’s important to consider a few things.
First, though costs vary based on the amount of care provided, the size of the unit and geographic location, CCRCs can be very pricey, costing more than a lot of individuals with moderate income or assets can afford. For example, entry fees can range from $30,000 to upwards of $1 million and monthly charges can run between $300 and $5,000. Seniors often use proceeds from selling their home to pay for a CCRC, but there could be tax consequences, since the IRS doesn’t permit people to take gains from selling their home and roll them directly into a CCRC unit.
Medicaid eligibility is another consideration. Residents typically put their entry fees in an escrow account, which used to be excluded from their countable assets for Medicaid eligibility purposes. But since 2006, these are considered countable resources if, among other things, the fee is refundable should the resident die or leave the community or if the entrance fee does not confer an ownership interest. Because of fine print like this and complicated fee structures that differ between CCRCs, it’s a good idea to review your contract with an elder law attorney before signing.
One more thing to consider is whether the CCRC has policies that deny residents access to certain amenities or activities or segregates residents altogether when they move to a higher level of care.
For example, a woman in Alabama was banned from bingo games when she moved to her facility’s nursing unit while rehabbing from back surgery, even though she easily could have attended the games with a motorized scooter. Meanwhile, a CCRC in Norfolk, Virginia, abruptly declared a popular waterfront dining room off-limits to those in assisted living and nursing units, resulting in longtime friends and even married couples not being able to eat together.
Media attention brought about reversals in both cases, and some believe that these policies violate the Americans with Disabilities Act. But even if they don’t, these are the types of things you should ask about and discuss with an elder planning lawyer when deciding whether to move into a particular community.