Continuing Care Retirement Communities

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Where a person lives directly impacts that person's quality of life. While most older people continue to live in private homes or apartments, some older people choose to live in an organized community such as a continuing care retirement community (CCRC).

Definition and history

The American Association of Homes and Services for the Aging (AAHSA) defines a CCRC as an organization that provides individuals a combination of housing options, accommodations, and health care services, depending on the level of care needed. Thus, within a single setting, an individual can move from an independent to a more restrictive housing environment as his or her needs increase. A CCRC organization typically has a formal contract or agreement with an individual or couple entering the community that includes the costs and level of services that will be provided (Sherwood, Ruchlin, Sherwood, Morris, 1997).

CCRC organizations are not a new phenomena, but have been around for more than a century. Beginning in Europe as a means to shelter and care for the aged, early CCRCs were affiliated with religious organizations. By the 1900s there were seven CCRCs in the United States. As the older population experienced growth during the 1960s, there was a corresponding increase in CCRC development, and since that time the number of CCRCs in the United States has steadily grown. In the year 2001 there were almost 2,000 CCRCs located in the U.S. with the average resident population of these facilities around 300 (AASHA, 1999). Pennsylvania, California, Florida, and Virginia have higher concentrations of CCRCs, with the Philadelphia/Delaware Valley area recognized as the "CCRC capital of the world" due to the high concentration (45) of CCRCs in that area. The total number of residents in CCRCs make up roughly 2 percent of the older population.

A majority of CCRCs are not-for-profit organizations (AAHSA, 1999), and they generally have religious affiliations. Since the mid 1980s there has been a slow push away from nonprofit to for-profit CCRCs, and large corporations such as Marriot and Hyatt have entered the industry. However, the majority of CCRCs are still not-for-profit organizations.

CCRCs today

CCRCs vary in size, accommodations, and services provided. However, most CCRCs have several basic housing levels on one campus setting. Providing residents with a range of care options is termed the continuum of care.

Independent living unit (ILU). This type of housing, which is common to almost all CCRCs, may include apartments, cottages, one- or two-story houses, or luxury high-rises. Usually, amenities such as transportation to outside community events, meals, laundry service, housekeeping, security, and maintenance are included in the cost. An individual can choose to have more amenities, but extras come with an additional price. Health care services are available, but a resident living in an ILU is usually healthy and requires little health care assistance.

Personal care unit. (PCU) An individual living in a personal care unit usually has some trouble performing specific activities of daily living. This level of care entails help in such areas as personal assistance or medication monitoring, allowing a person to continue to live independently.

Assisted-living facility. A next step in the continuum between independent living units and nursing homes is the assisted-living facility. This type of housing is relatively new, and is designed for those individuals who do not require the level of care and supervision provided in a nursing home. In this type of facility, which is provided by most CCRCs, personal assistance with everyday activities such as dressing, eating, medication administration, RN staff, serving meals, rehabilitation, and bathing are common services available.

The nursing home. This type of facility is common to all CCRCs. Residents of a CCRC can utilize the nursing home to recover from a short-term illness or as a means of treatment for a chronic illness. In this type of housing, residents receive round-the-clock care from nurses and nurse's aides.

This continuum of care allows the individual to receive all necessary health care services within one campus. However, it is important to note that the progression is not always linear residents can move to any one of these housing arrangements and then back to the previous type of facility. For instance, an individual living in an ILU might receive care within the nursing home to recover from a short-term illness. After recovery, that individual could return to a less restrictive location.

Programs and activities. One of the CCRCs main objectives is to keep residents healthy. Although research is limited, some studies report that CCRC residents live one and a half to two years longer than other older adults. This may be because CCRCs take a more active approach to maintaining health than individuals living in the community might. There are different types of programs that have been established at CCRCs in this regard. Although not all CCRCs offer such programs, many encourage exercise by providing swimming pools, tennis courts, golf courses, and walking paths, and many promote proper nutrition. Most CCRCs provide comprehensive meal options, promote proper medical care, and have health and dental facilities on the campus. In addition, they promote social involvement through a range of social and educational programs.

The contract

The contract that individuals sign when entering a CCRC determines the amount that their stay will cost and the type of amenities and health care services that will be provided. There are three main types of contracts: extended, modified, and fee-for-service.

About four out of ten CCRCs use an extended contract (AAHSA, 1999), in which individuals agree to pay an entry fee up front and a monthly fee for the rest of their life. Monthly fees usually only increase due to inflation or increased operating costs. This type of contract covers almost all of the health care needs of residents throughout their stay.

Three out of ten CCRCs provide a modified contract, which generally has a lower entry and monthly fees than an extended contract. However, there is a set limit on the number of days of health care per year that an individual can receive, and each resident is responsible for all costs beyond that limit. Like an extended contract, the costs of this agreement can only go up based on inflation and increased operating costs.

A fee-for-service contract is used by about three out of ten CCRCs. Individuals utilizing this option typically come from outside the organization to access the nursing home facility and are willing to pay as they receive care. Costs for this type of care can increase with inflation, operating costs, and with the amount of long-term care usage.

Cost and fees

It is relatively expensive to live in a CCRC. Data show that most individuals choosing CCRC's are in the middle- or upper-income bracket. Cost can be based on the type of contract negotiated, the size of apartment, and the services and amenities received. According to AARP, entry fees can range from $20,000 to $400,000, with monthly payments ranging from $200 to $2,500. AAHSA (1999) found that entry fees ranged from $34,000 for a studio apartment to $439,000 for a two bedroom home. The range of monthly fees was $1,383 for a single resident to $4,267 for a couple.

Whether or not one receives a refund of the entry fee, either for choosing to leave the community or upon one's death (in which case, a person's estate would receive the refund) depends on the particular CCRC. Organizations usually establish one of three types of refunds: declining scale, partial refund, or full refund. With a declining scale refund, the longer an individual stays at a facility, the more the entry fee refund decreases. With the partial refund option, a percentage of the fee will be refunded within a particular time period, after which there will be no refund. Full refunds are not generally available, though some CCRCs with high entry fees do offer them.

Requirements for entry

CCRC facilities can have different requirements for entry. Most typically require entering individuals to have physical and mental examinations, and they also stress the importance of having full Medicare coverage. It is important for the individual to demonstrate the ability to pay the entry and monthly fees.

Regulations governing CCRCs

Due to past occurrences of bankruptcy in the CCRC community, different regulatory methods have been established to protect the consumer and help bolster the image of CCRCs. As of 1997, there were thirty-seven states that had specific regulatory requirements for CCRCSup from twenty-eight in 1988 (Brod, 1997). Each state has different requirements for licensing and accreditation. These requirements include financial disclosure, consumer protection, refund provisions, and resident contracts (Somers and Spears, 1992). The federal government has little involvement in the regulatory process, but does regulate those nursing homes located within CCRCs that rely on Medicaid and Medicare reimbursement.

Fearful that increased federal regulations will potentially raise costs, the industry has also established its own regulatory and accreditation systemthe Continuing Care Accreditation Commission, established in 1985, has set standards "focusing on finance, governance, residential life, and health care" within CCRCs (Sanders, 1997, p. 16).

Current issues

One of the most challenging issues faced by CCRC organizations is whether such an option is affordable to most older people. Many people cannot afford high entry and monthly fees. Certain communities have used government subsidies through HUD to help low income individuals afford CCRC housing (Sanders, 1997). This suggests that unless government dollars are placed towards CCRCs, the only older individuals able to afford high entry fees will continue to come from the middle or upper class.

Another issue is whether individuals within CCRCs are truly "aging in place." By aging in place, older individuals expect to reside at home throughout the remainder of their lives. However, residents must still make the transition from home to the CCRC setting. This transition can be hard for some older individuals who find themselves having to adjust to a new setting and lifestyle with rules and restrictions (Sanders, 1997). Furthermore, as health issues increase they will need to move again.

Age segregation is another important issue faced by the CCRC industry. There has been an attempt in American society to move away from age segregation and to develop programs that keep older individuals involved in the community. Some researchers estimate that almost 10 percent of the older population might come to live in a CCRC. It is not known what affect this separation from other age groups might have, and the question of whether this might cause problems across generations needs to be addressed.

The issue of financial solvency must also be addressed. In the past there have been problems with CCRCs going out of business or going bankrupt, leaving individuals out in the cold. There needs to be a system in place to ensure financial security for individuals living in these facilities.

Research has shown that the different activities and programs promoting a healthy lifestyle help to reduce the risk of disease and disability in the CCRC population (Scanlon and Layton, 1997). Yet, its effectiveness on lowering health care costs has not been shown. Until research is conducted that controls for differences in income, education, health, and other factors it will be difficult to get an accurate idea on CCRC's cost effectiveness (Scanlon and Layton, 1997).

Regardless of these issues, CCRCs have the potential to be a very important option for older adults in the future. Already CCRSs have shown that they promote healthy lifestyles. Further research will strengthen this position. Policy changes that help make CCRCs more affordable could also increase the number of residents and also the number of communities. What is not clear is exactly what path the industry will follow.

Ian Nelson

See also Financial Planning for Long-Term Care; Housing; Long-Term Care.


AARP. "Continuing Care Retirement Communities." World Wide Web document, 2001. Sanders, J. "Continuing Care Retirement Communities: A Background and Summary of Current Issues." World Wide Web document. 2001.

Scanlon, W., and Layton, B. D. Report to Congressional Requesters: How Continuous Care Retirement Communities Manage Services for the Elderly. Washington, D.C.: U.S. General Accounting Office, 1997. Available online at:

Somers, A. R., and Spears, N. L. The Continuing Care Retirement Community. New York: Springer, 1992.

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Continuing Care Retirement Communities

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