CCRC to Offer Long-Term Continuum of Care to Seniors

By Wayne L. Kaplan

While the seniors’ housing industry is not new and nursing facilities seem like they have been around forever, it still took quite a long time for most people in New York to become familiar with assisted living facilities. Within the next few years, they will no doubt become familiar with another type of seniors’ housing product, the continuing care retirement community (“CCRC”), sometimes also known as a life care community.

CCRCs are different from other housing with care options for seniors because they offer a long-term (care insurance) contract that provides for housing, services and healthcare, usually all in one location. A CCRC, which is regulated by the state, supplies a continuum of care throughout the lifetime of its elderly residents by combining all three levels of care – independent living, assisted living and nursing home care. Residents typically enter the independent living portion of the community while still relatively healthy, and may then move to more acute care if and when it becomes necessary, usually at no extra cost. As in all residential real estate, housing chosen by each resident in a CCRC is based upon their needs, their desires and their financial situation.

CCRCs typically require an entrance fee and monthly maintenance payments. Entrance fees can range from under $100,000 to over $1 million, and monthly maintenance fees can range from $1,000 to $4,000. In some CCRC’s, a resident may own their living space (ex. a condominium or co-op) and in others the space is leased.

Typical fee arrangements include extensive contracts (which include unlimited healthcare at little or no increase in monthly fee); modified contracts (these include a specified amount of healthcare and if the resident needs more, they are responsible for payments); and fee-for-service contracts (residents pay full daily rates for healthcare).

As CCRCs materialize from the start-up phase of construction and begin their fill-up stage, they enter a critical period of financial performance, the eventual success of which is dependent upon many factors, including decisions made at the earliest planning stages. When these communities are young, they don’t enjoy the security of stabilized, full occupancy and proven operations.

Their success is dependent on skillful management and marketing practices suitable for new communities, as well as assumptions made and executed years in advance.

Today, there are 7 CCRCs that are open and operating in New York, and they span the state from Long Island to Buffalo. It is reasonable to expect that more will be on the way in the near future.
Wayne L. Kaplan is a partner at Ruskin Moscou Faltischek, P.C. and has been a member of the Continuing Care Retirement Community Council since 1990.

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