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Consumer Guides to Choosing a CCRC (Life Plan Community)

The material provided here is intended to help you to think of the things you will want to consider in making your decision.

The decision is yours and, while we are seeking to be fair and objective, the information provided here is only complete to the best of our knowledge and belief. We welcome any corrections or additional information.

It's crucial for anyone considering paying an entrance fee to move into a Continuing Care Retirement Community (aka Life Plan Community) to understand that the entrance fee investment (with a very few exceptions) is an at risk investment.  There are no guarantees for CCRC investments such as those which protect bank depositors (FDIC), insurance policyholders (NOLGHA), stock brokerage investors (SIPC), or pensioners (PBGC).

Resident Entrance Fee investments are almost always fully at risk.

This is true even for so-called "refund" contracts since most refund contracts are dependent on reoccupancy of the same residential unit by a successor resident.  In other words, the successor resident's investment goes to the predecessor or the predecessor's estate.  Such an arrangement depends on a perpetual cascade of new residents, though we all know that most enterprises are eventually superseded.

Prospective residents should have these risk factors clearly in mind as they make their decisions about moving to a CCRC.  Some few give residents a first deed of trust claim on the property.  That is a major plus.  Others give residents ownership and decision authority.  That is very rare.

In addition to the guides below, provides for a fee a compendium of factual information about CCRCs.  There is also an accreditation organization, CARF-CCAC, which is funded by fees paid by providers and which has been known to continue the accreditation of CCRCs that were in financial receivership.  CARF-CCAC, however, can be a valuable assistance for CCRC owners, whether for-profit or nonprofit, who seek to improve the quality of their communities.

Note that there are many Consumer Guides for prospective CCRC residents.  Many of these represent a point of view -- that of a skeptical consumer; that of providers; that of regulators; etc.  All of these color the presentation.  There are also more that are not included here.  We've included enough to give you a sense that no one guide is fully reliable and sufficient.  You will have to use your own judgment or to rely heavily on the objectivity and knowledge of your financial adviser.

Regulators, for instance, whom you might expect to be highly consumer-oriented, also have an obligation to help the industry to thrive in their state.  Moreover, they may want to believe that their oversight is sufficient, though "monitoring the financial condition of CCRCs" does not prevent financial losses for residents.  None of the parties are fully impartial so you will have to use your own judgment.

While residents now are at risk in CCRCs that need not be the case.  Click here to see a regulatory framework derived from life insurance that can protect residents from loss and create a more trustworthy CCRC industry.  That trustworthy industry does not now exist, though some providers are more to be trusted than are others.

The Model Laws propose a comprehensive regulatory framework, analogous to life insurance, at the state level.  It's generally considered that state level regulation is more favorable toward business interests.  The alternative is Federal legislation, and in the absence of state level action, it would be appropriate for Federal legislators to pursue a similar program at the Federal level.

In the absence of effective legislative and regulatory oversight, prospective CCRC residents should be very cautious as was advised by the Federal Government Accountability Office in its report, "Continuing Care Retirement Communities Can Provide Benefits, but Not Without Some Risk."  The title says it all.  Nothing of substance has changed since the report appeared despite several CCRC financial failures.

CCRC Residents need the protections of the Model Laws.

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