A challenge which families face with the aging process is helping the older generation decide when it is time to move from the family home. Often I hear “they’ll have to carry me out of my home because I’m not leaving.” While the intent might be to leave the home in a hearse, such a stubborn vow can lead to being taken by ambulance to an emergency room, and eventual discharge to a nursing home, an outcome that is not what would have been chosen.
Making a move from the family home is a decision that is easy to procrastinate but difficult to execute. Memories seem to be anchors. Sorting through decades of accumulated possessions is a major challenge. As aging homeowners become more frail, the tasks related to a decision to downsize and relocate become increasingly burdensome.
Moving to a retirement community is normally a voluntary choice of a reasonably healthy individual or married couple who have both the desire and ability to continue to live with some independence. When older persons are hospitalized and can’t return home safely, they often are discharged to a skilled nursing facility. If an older person is at a point where they cannot live without some assistance, a personal care home is a good option for the family to encourage.
Wise persons who plan ahead have many options for retirement living, including “55 plus communities” and “independent living facilities.” These options might appeal to those who are hopeful of recouping their equity, or who are unable or unwilling to pay significant admission fees. But neither is licensed to offer any care services; and they are, therefore, not an ideal choice for an individual or couple who hopes never to be required to move again.
Continuing Care Retirement Communities, known as CCRCs, can be a better option for healthy older persons who have adequate financial resources and a desire to choose their final residence. The ideal CCRC offers an array of options which allows residents to move in initially to an independent living situation, with the understanding that various levels of care will be available, if and when needed. This type of flexibility is ideal for a married couple which wants to be assured that, if one of them needs a level of care in the future, the other will be able to function with some independence nearby.
There are only 1,900 CCRCs nationally, of which about 80% are owned by non-profit organizations. Only 10% of Americans can qualify financially for admission to a CCRC, and fewer than 2% of Americans reside in a CCRC. To a certain extent, CCRCs are an exclusive luxury.
There are differences in the entry agreements and options offered by various CCRCs. Often, those entering a CCRC pay a sizeable buy-in fee, which is nonrefundable after five years. There are a variety of ways that a CCRC agreement can be structured, but there is always a monthly fee. The particulars of how the entry fees and monthly fees are established are sometimes referred to as Type A, B or C contracts. Some CCRCs have moved away from entry fees and charge higher monthly fees.
Usually a CCRC will scrutinize applicants’ finances prior to agreeing to admit them, with the goal that the applicants’ money will be adequate to pay through the end of their lives. Under typical circumstances, CCRCs promise that its residents will be guaranteed priority access to nursing care if and when needed, and never will be denied service due to an inability to pay. In this sense, moving into a CCRC is similar to long term care insurance. When the residents’ money runs out, care in subsidized by both a benevolent fund and, in many cases, Medicaid.
CCRCs are regulated by various state agencies, including the Department of Health and the Insurance Department. While the Department of Health keeps close watch over the care given, the Insurance Department does not scrutinize the financial status of CCRCs to the level one might expect. For this reason, it is important that applicants should consider the CCRC’s underlying financial strength, which must be disclosed as part of the admission process.
Before making a decision to move into a CCRC, applicants should be reasonably certain that they will not desire to move again later, such as to reside closer to grandchildren or in a different climate. The opportunity to move into a CCRC community where friends are already present can be an attractive consideration. However, it is not unusual for retirees to enter a CCRC from outside the area without knowing anyone; and the variety of activities within a CCRC gives opportunity to make new friends and feel a sense of community.
The average entry age to a CCRC is 81 years old, which seems almost too late to enjoy all the benefits that a CCRC has to offer. But for couples who are reasonably healthy, a CCRC can still be a great solution. If health concerns are evident, other options might be more affordable and practical, especially for dementia, for which some CCRCs are better equipped than others.
It is wise to have a CCRC entry agreement explained by a knowledgeable attorney. The goal should not be to negotiate a better deal; however, occasionally promises made in good faith by the CCRC at the time of admission are different from the terms of the agreement. In those cases, it can be helpful for all concerned to clarify any promises that that been made, as well as to make certain that the CCRC applicants have a realistic and thorough understanding of the contract
For those who been well advised as they enter a CCRC, it could be the last time they ever need to seek legal advice. That, coupled with the knowledge that they will be taken care of in the future even they run out of money, is very reassuring. That’s why CCRCs can be better than a 55 plus community or independent living facility for those who can afford them.
For more information, you can attend our free seminar on Thursday, June 20th. Please call us at 717-697-3223 to RSVP.
Dave Nesbit
Attorney