Considering a continuing care retirement community? Here's what you should know

With over 2 million residents over the age of 65, it’s not necessarily surprising that Pennsylvania has the most continuing care retirement communities (also known as CCRCs) of any state in the country.

What’s more impressive is that Lancaster County is the most saturated county in the U.S. in terms of the number of CCRCs relative to its 65-and-over population, says Lisa McCracken, director of senior living research for Ziegler, a Chicago-based investment banking firm.

The county has either 18 or 20 CCRCs, depending on whether or not you count Willow Valley Communities’ three campuses separately, McCracken says, and a 65-plus population of 97,200. Even when you consider that many residents of Lancaster County’s CCRCs come from out of state, the numbers are still impressive, she says.

“Lancaster County is very unique to have that many for the total population,” says McCracken, who is based in Lancaster. “We’re very heavily represented by those CCRCs.”

In fact, Lancaster County alone has more CCRCs than a number of states, including Nevada, Utah, New Mexico, Louisiana, Arkansas, Maine and Vermont.

Why the heavy concentration here?

“We’re sort of the perfect storm of history, geographic location, cost of living and cost of development,” McCracken says.

The CCRC concept came from the Philadelphia area and the Quakers, she says, and melds well with the area’s strong nonprofit presence. Most of the county’s CCRCs are not for profit. Lancaster County is also a more affordable option compared to more metropolitan markets, yet it is still located a convenient distance from New York City, Philadelphia and Washington, D.C. It’s also more feasible to expand and develop here than in other markets, McCracken says. And from a regulatory standpoint, she adds, Pennsylvania is generally more CCRC-friendly than states like New York and Maryland.

The ABCs of CCRCs

With so many CCRCs in our own backyard, it’s important to understand how they work. As the name implies, CCRCs are age-restricted communities that offer a continuum of care that includes a combination of independent living, assisted living and skilled nursing, all on the same campus. But that doesn’t mean they are all alike.

“There’s a lot for today’s customers to sort through,” McCracken says.

CCRCs are all licensed and regulated by the state. They generally fall under three categories: an entrance fee model with contract, which you will most commonly find in Lancaster County; a rental model, which has no entrance fee but also offers no coverage for the cost of assisted living or nursing services; and an equity co-op, where residents buy and own their units. Fewer than 2% of CCRCs in the country follow the co-op model, and most are for-profit. Some Lancaster County CCRCs include a rental option.

Among the entrance-fee contract models you’ll find in Lancaster County, there are three types that differ primarily in terms of upfront costs and the benefits included, McCracken says. Some communities offer only one contract option; others offer several.

TYPE A, OR LIFECARE:

In Lancaster County, Willow Valley Communities is the only CCRC that follows this model alone. Others may offer it as an option. Residents pay an entrance fee and an ongoing monthly fee for living accommodations and an extensive range of services and amenities.

“You pay a higher upfront entrance fee than a B or a C contract, but if you happen to need assisted living or memory care or nursing care, your monthly fee essentially stays the same,” McCracken says. “Basically, you’re preparing upfront for a potential scenario where you’ll need skilled nursing.”

With a Lifecare contract, the community bears the majority of the financial burden should the resident require long-term care. With the cost of skilled nursing in the county averaging over $10,000 a month, that could mean substantial savings in the long run, should that extra care be necessary. Basically, McCracken says, you’re paying more for a what-if.

“If I’m in a Type A community and I’ve paid more upfront I’m going to be way better off if I end up being in skilled nursing,” she says.

TYPE B, OR MODIFIED:

These contracts have an entrance fee that is lower than a Type A, along with an ongoing monthly fee that covers an independent living unit as well as certain services and amenities. Type B contracts allocate a certain number of days for assisted living or nursing care at no additional charge and/or discounted rates. That comes in handy if, say, you need a few days of rehab after a fall, McCracken says.

“If you end up in there for an extended period of time, you are going to have to pay some more for that,” McCracken says.

Those covered days or discounted rates vary by community, she says.

TYPE C, OR FEE-FOR-SERVICE:

These contract models have the lowest entrance fees along with an ongoing monthly fee, but they do not included any discounted health care or assisted living services, McCracken says. The resident receives priority or guaranteed admission for those services, but they must pay the regular daily rate paid by those admitted from outside the community.

Depending on the type of contract, some communities also may refund a portion of the entrance fee if the resident dies or, in rare cases, chooses to leave, McCracken says. Again, refund policies differ.

It’s difficult to offer average entrance fees for each model, since they vary widely depending on the type of housing a resident chooses, McCracken says. Within a single community, entrance fees can vary by several hundred thousand dollars. It comes down to simple real estate math: You’ll pay a lower entrance fee for a small one-bedroom apartment than you will for a four-bedroom cottage.

In some cases, entrance fees can also vary depending on the choice of refund policy.

Brethren Village is unusual in Lancaster County in that it offers all three entrance-fee contract options, as well as rental options.

“It’s our unique position within the marketplace. ‘More choices. Your choices,’ ” says Tara Ober, vice president of communications and resident life. “The multiple entrance fee and monthly service fee options are just one of the ways that we can customize a resident’s retirement living experience.”

Entrance fees at Brethren Village are based on the type of housing and the type of refund plan a resident chooses, not on the type of contract. The varying costs of the Type A, B and C service plans are reflected solely in the monthly fees.

Residents who choose a 0% refund, can expect to pay an entrance fee of $31,600 to $347,600, depending on the size and type of apartment or cottage they want. Residents who choose a 90% refund, can expect to pay an entrance fee of $83,400 to $566,200.

Monthly fees range from $887 to $2,128 per person for a Type C fee-for-service contract, $1,210 to $2,357 for a Type B modified contract, and $2,247 to $3,394 for a Type A lifecare contract. Again, the range in fees reflects the difference in type and size of housing.

“Communities in Lancaster do vary, and they vary depending on what they offer, the type of housing options, amenities, all of those things,” McCracken says. “There are some that are more modest and focus on more of the middle market and some that are more upper middle.”

All those options can make for a more challenging decision, but future CCRC residents likely aren’t complaining.

“What we’ve seen with the baby boomers, and this is a national trend, today’s customer likes choice,” McCracken says. “We always say choice equals control.”

Crédito: MARGARET GATES | CUSTOM CONTENT EDITOR