Work/Life Trends
Understanding the Costs of Continuing Care Retirement Communities

Some of your employees might be investigating various types of retirement communities for their spouses or aging loved ones. For many, Continuing Care Retirement Communities (CCRCs) may have a special appeal. CCRCs give seniors the ability to “age in place” (remain in familiar surroundings as they grow older) by offering them access to a package of services that will meet their health and housing needs as these needs change over time. Individuals entering a CCRC normally sign a long-term contract for housing, nursing care and other services. For these reasons, CCRCs tend to be more expensive than other types of retirement communities.

In addition to monthly fees (ranging from $1,000 to $5,000), CCRCs typically charge an entrance fee that can range from $30,000 to $800,000 and some may charge additional fees for services, depending on the contract one signs. Most CCRCs offer three types of agreements:

	Fee-for-Service Agreement—Usually includes housing, residential services, amenities and, possibly, short-term and emergency nursing care but residents must pay for all long-term nursing or health care at full per diem rates. Entrance and monthly fees are the lowest under this agreement, as residents are responsible for costs of long-term care.
	Modified Agreement—Normally includes housing, residential services, amenities and a specified amount of long-term nursing care with no substantial increases in periodic payments. After a specified period, residents pay a per diem or discounted per diem charge for any additional nursing care required.
	Extensive Agreement—Also known as a “life care agreement,” this includes housing, residential services, amenities plus unlimited long-term nursing care without substantial increases in periodic payments (except for normal operating costs and inflation adjustments). Extensive agreements provide for prepayment of medical expenses, much like an insurance agreement. Generally, this plan is the most expensive, having the highest entrance and monthly fees. It also offers the most services. This plan is increasingly difficult to find due to changing trends in the structure of CCRCs; those that do offer these lifetime contracts typically charge fees in excess of $400,000.