Continuing Care Retirement Communities
Understand the Contract
While overall charges vary depending on the type of contract entered, the cost of living in a CCRC is substantial, and residents must often sign a contract for more than one year — sometimes for life — and pay an entrance fee before being admitted. These fees range from about $10,000 for a studio apartment for one individual to $500,000 or more for a two-bedroom home for a couple. In addition, residents may either transfer their assets to the facility or pay a large monthly fee; monthly fees generally start at $2,000 a month.
Some CCRC contracts allow residents to buy their apartment or other housing and then pass it along to survivors at death as they could any other type of real estate.
In other CCRCs, however, residents must sign a “life care” contract. In such an arrangement, the resident pays a higher fee upfront in addition to the monthly installments. In exchange, the retirement community agrees to provide complete care for the rest of the resident’s life: acute, physician, and emergency medical care and different levels of care as needed — including skilled nursing care either on the premises or nearby. Life care facilities also agree to subsidize residents who become financially unable to pay their monthly care fees. The trade-off is that residents cannot own their living spaces under a life care contract; the dwellings revert back to the community when the residents die.
Many CCRCs require that residents have Medicare Part A and Part B coverage in addition to Medigap insurance to cover the costs of medical care and related services received while living there; some CCRCs insist that residents carry long term care insurance.
However, neither insurance nor government programs provide financial help in paying the direct costs of a CCRC.