Understanding CCRCs & The Benefits

Buena Vida Estates provides relief.

A CCRC is a continuing care retirement community.

So when you become a resident, you no longer need to worry about financial security, the rising cost of health care, property taxes and insurance, or home maintenance costs!

What is a CCRC?

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Continuing Care Retirement Communities (CCRCs) provide the answer for a growing number of seniors looking for the opportunity to enjoy an active and enriching lifestyle now, while knowing they’ve planned for their future.

The CCRC concept has been around for more than 50 years. Even though this financial arrangement has evolved over the years; the concept of providing care and services for someone over their lifetime has remained consistent. Studies conducted at major universities have concluded that people live longer in CCRCs than if they lived in their homes.

CCRCs provide access to a continuum of care – independent living, assisted living, memory support and skilled nursing care. Typically, this care is located on the same campus as independent living. The level of service that is included and the way residents pay for the services, vary significantly among CCRCs.

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Why is there an entrance fee to move to a CCRC?

An entrance fee is required since this fee allows the community to provide a wide array of services and amenities and long-term protection to keep the community sustainable for many years.

Typically, people use the proceeds of the sale of their home to pay for the entrance fee without the need to dip into other assets.

The refundable portion of the entrance fee varies from community to community. Many CCRCs offer a choice of refundable options to best suit ones’ financial goals. The percentage of refund ability that you chose will be returned to you, your children or your estate.

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Can a retirement community provide a continuum of care and not be a CCRC?

Yes, however you need to understand what levels of care they are “licensed” to provide and what guarantees are in place that care will be made available to you when you need it.

Unfortunately, some communities will exaggerate the levels of care that they can provide or tell you that you won’t ever need the higher levels of care (more than what they are licensed to provide). This is a gamble and something you may want to investigate further.

The non-CCRC should share with you the expected costs associated with their care so you can determine your level of exposure and risk. You should also understand the ramifications if you deplete your assets while living at this community. There could be a likelihood that you will be asked to leave if you cannot afford to pay the monthly service fee.

A true CCRC in the State of Florida is regulated by the Office of Insurance Regulation (OIR) and must adhere to their strict guidelines including fulfilling its contractual obligations to its residents.

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I’m active and independent.Why should I consider Buena Vida now?

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The best time to move is now, while you are able to enjoy all that Buena Vida has to offer. Should you wait until you develop a need for care, you will be in no shape to move, and you may no longer qualify for continuing care coverage.

Why is there a medical and financial approval process to move to a CCRC?

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Because a “Type A” CCRC provides-access for care and services over one’s lifetime; the community must fully understand the level of risk involved in underwriting this individual.

Unfortunately, some people wait too long and don’t qualify for continuing care coverage. Moving to a CCRC before a need arises is the best decision you can make.

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What is the Office of Insurance Regulation (OIR), and why is it important to me?

The OIR serves Floridians through its responsibilities for regulation, compliance and enforcement of statutes related to the business of insurance.

It is within the OIR that the mission of public protection is implemented; this includes the requirement of reserve funds that a CCRC must maintain and detailed financial reporting.

Non-CCRCs are not regulated by the OIR, therefore are not subject to an impartial, third party oversight. More information about the OIR can be obtained at www.floir.com.

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How does a Not-for-Profit CCRC differ from a For-Profit community?

As a 501 (c) 3 corporation, a not-for-profit CCRC like Buena Vida, re-invests its profits back into the community.

At Buena Vida, a board of local community leaders has over- sight of the community and ensures that quality services are provided to the residents. Substantial savings occur for not-for-profit CCRCs including employee benefits and taxes which allows the community to operate more efficiently. Resident donations are also tax deductible.

A For-Profit community is “profit-driven” and makes decisions based upon generating revenue for owners/investors. These decisions may or may not be in the best interest of the residents of the community.

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Are there any tax benefits of living in a CCRC?

Yes. The IRS considers a portion of the entrance and monthly fee a pre-paid medical expense. At Buena Vida Estates, this percentage has been averaging around 22%. Please consult with your financial planner and/or tax advisor for more information.

Why did you choose a CCRC?

A type A CCRC, like Buena Vida Estates, provides a contract for care and services during one’s lifetime. There’s also financial assurance taht you will NOT be asked to leave due to a medical or financial reason. This gives me, and my family, peace of mind.

Other Frequently Asked Questions:

Are there different types of residency contracts for CCRCs?

Yes. There are three different types of residency contracts that exist (A, B & C). The “Type A” is the most exclusive and provides the highest level of protection and is what Buena Vida Estates offers. A “Type A” contract provides a contractual commitment to care and services over one’s lifetime. This includes guaranteed access to assisted living, memory support and skilled nursing care. In addition, “Type A” provides financial protection should someone deplete their assets (beyond their control). This level of protection assures residents the peace of mind of knowing that they are safe and financially secure during their lifetime.

A “Type B” contract provides for a predetermined number of days of care at a discounted rate. Additional days are billed at market rate. With a “Type C” contract, residents pay current market rate for care services. These rates vary depending on the specific care required.

How does a “Type A” contract differ from the lease agreement at a rental community?

The lease agreement at a rental community typically does not include the provision of a continuum of care. This means that a resident who requires care must make separate arrangements for care services and pay for this care at market rates on a fee-for-service basis. If these services are not available within the community, the resident will be required to move from the community.

In addition, a CCRC “Type A” contract provides for care and services during one’s lifetime and a financial assurance that someone will not be asked to leave should they deplete their assets (beyond their control). Rental contracts do not provide this level of protection.

I am considering a retirement community that is not a CCRC. They are telling me “not to worry, we'll take care of you.”

Obviously, the choice is yours. However, be wary of promises that are not in writing. The last thing you want to do is move to a community and discover later that what you thought was originally promised, is not the truth.

Be cautious of a non-CCRC with a high refundable entrance fee. You need to make sure the company has liquid reserves in place to repay when someone moves out. It is also important to understand the risk if the non-CCRC is sold or has financial difficulties, since they may not be able to repay the refundable portion of the entrance fee. This is a highly volatile issue with non-CCRCs because they are not regulated by any state agency. Remember, if it is too good to be true, it usually is.

How does care differ from a CCRC than in a typical retirement community?

The access to a continuum of care is a major component of the lifestyle at a CCRC; the quality and compassion of care is usually much greater than what you find in a private- pay facility. Since the care is being provided on the same campus in a CCRC, there is a good likelihood that you will know the staff providing the care, which delivers yet another level of comfort. At Buena Vida Estates, the nurse-to-resident ratio exceeds industry standards.

I have a long-term care (LTC) insurance policy that covers skilled care. Why should I consider a CCRC like Buena Vida?

While a long-term care insurance policy may help to defray the cost of long-term care, it does not provide access to care. Some LTC policies have limitations on duration and/ or reimbursable amounts as well as limitations on assisted living services. People who move to Buena Vida with a LTC policy will be eligible to use their policy when Healthcare services are needed. Please ask for more details about this program.

It is also important to recognize the amount of burden one puts on their spouse, family and friends when someone elects to “stick it out” in their home. Care-related decisions are not easy to make and often the caregiver’s health suffers and they end up requiring a higher level of care.