Many of us, including our loved ones, have terrifying memories of visiting Grandma or Grandpa at a nursing home. We have visions of the residents sitting slumped over in wheel chairs, the dismal aesthetics, unpleasant odors, terrible food, a dying roommate and the ever popular bingo game as the daily activity. These sorts of thoughts, whether exaggerated or fully accurate, will deter a loved one from considering a move to a retirement community.
Yesterday’s nursing homes focused on taking care of the sick. In contrast, the CCRCs of today not only seek to offer lovely aesthetics but also seek to maintain a senior’s independence by offering many a la carte services that allow the senior to stay in his/her independent living apartment. For instance, a senior may be independent for all practical purposes, but might feel more psychologically secure if someone stood by while he or she is taking a shower. These types of a la carte services can help delay a premature move to a higher level of care and allow a senior to remain in his/her own apartment for as long as possible. However, if a senior needs more care in the future, a true CCRC will offer assisted living and skilled nursing to address future health care needs without moving. Thus the senior and his or her family will avoid the trauma of a second move and the loss of friendships the senior has cultivated.
From the financial aspect, many CCRCs have shunned the typical rental arrangement and converted to Life Care Contracts, meaning that if a resident is at some point unable to meet the financial obligations of paying his/her monthly fee, the senior’s care will be subsidized by the rest of the residents. In other words, care is guaranteed “for life.” Here is a brief, oversimplified, explanation as to how it works:
When a senior applies to move into a CCRC, the prospective resident will fill out an application that discloses his or her finances. Obviously, each prospect is underwritten according to certain guidelines for financial strength. The senior is also required to submit a history and physical from his or her doctor to determine that s/he can function independently. If a senior passes both parts of the underwriting process, s/he will be responsible for paying the following two components of the life care contract:
Entrance Fee–I have seen these range (very ballpark figures) from $85,000 – $1,000,000 depending upon the community. This represents a long-term care insurance component, meaning it is collected from each senior at the community and is used to cover the future health care costs of all residents. It is also sometimes called a membership fee. The unused portion can be refunded to the senior if s/he moves out or to his/her estate if the senior passes away. Normally, this money isn’t returned until the apartment is reoccupied. Generally,the percentage can be refunded in amounts of 100%, 90%, and 50%, or not at all.
Monthly Fee–This component covers food, maintenance, activities, and transportation in independent living and will vary according to the type of contract:
Type A–Most expensive–Offers unlimited days in the skilled nursing area at little or no increase in cost to the resident, except inflation.
Type B–Also referred to as “modified.” This contract limits the number of days in skilled nursing, typically 60 to 90 days, exclusive of Medicare days.
Type C–A fee for service is charged for each level of care.
Costs will vary depending upon the size of the apartment. For those seniors who are not concerned about leaving an inheritance to anyone or would like to invest money elsewhere, the 50% refundable option can represent some true savings and guarantee care for life!
These may be good retirement thoughts to ponder while you enjoy the Labor Day holiday!
For all of your senior living needs, contact Andrea Donovan Senior Living Advisors. Call us at (708) 415-2934 or email us. Please visit our website. Please watch my video to learn how the process works and learn what some clients have to say.