2016 Impact of Consolidation on Long-Term Services & Supports 31
F. Consumers Receiving LTSS Through Membership in a Continuing Care Retirement Community
A significant number of individuals needing LTSS receive them through membership in a Continuing Care Retirement Community (CCRC). By definition,
CCRCs are generally residential facilities established in a campus-like setting that provide access for older Americans to three levels of housing and care: independent homes or apartments where residents live much as they did in their own homes; assisted living, which provides help with the daily tasks of living; and skilled nursing care for those with greater physical needs. Most residents must be able to live independently when they enter into a contract with a CCRC, with the intent of moving through the three levels of care as their needs change.178
There are several general types of contracts that a CCRC might offer to a prospective resident, each varying in terms of required entrance fee and monthly payments.179 In Type A (often labeled extensive or Life Care arrangements), in return for a substantial entrance fee and reasonably stable monthly payments, a resident is entitled to housing, residential services, amenities, and unlimited health services.180 The CCRC accepts the financial risk that a resident’s need for services, and the resource cost to satisfy that need, will increase over time.181 In Type B (a modified contract), the initial monthly payment is less for the same housing and residential amenities, but only certain health services are included, with the resident paying out-of- pocket for assisted-living or skilled nursing services that exceed the modified contract’s coverage limits.182 In fee-for-service (Type C) contracts, the resident’s lower entrance and monthly fees cover independent living, but the resident is at risk to pay market rates for all health-related services needed.183 A Type D (rental) contract involves no entrance fee but provides the resident
178. U.S. GOV’T ACCOUNTABILITY OFFICE, GAO-10-611, OLDER AMERICANS: CONTINUING CARE RETIREMENT COMMUNITIES CAN PROVIDE BENEFITS, BUT NOT WITHOUT SOME RISK 3 (2010) (reporting on a CCRC study, which highlighted the importance of states being vigilant in their efforts to help ensure adequate consumer protections for residents. “GAO was asked to ( 1) describe how CCRCs operate and the risks they face, ( 2) describe how state laws address these risks, ( 3) describe risks that CCRC residents face, and ( 4) describe how state laws address these risks. To review these areas, GAO analyzed state statutory provisions pertaining to CCRCs with respect to financial oversight and consumer protection, met with selected state regulators, and interviewed CCRC providers, resident’s associations, and consumer groups.”). 179. Id. at 5–6. 180. Id. 181. Id. 182. Id. 183. Id.