A new Government Accountability Office report advises consumers that Continuing-Care Retirement Communities’ (CCRC) high entry cost can also put residents at a high level of financial risk, the Wall Street Journal reports.  The average entrance fee for a unit at a CCRC is $249,857, according to the National Investment Center for the Seniors Housing and Care Industry.  After this entrance fee, there are also monthly fees that are assessed depending on the level of care a resident needs and the type of contract they have signed. When a resident moves out of a facility or passes away, many contracts will state that they will not be refunded all or part of their entrance fee until after the CCRC has found another tenant.

In addition to the delay in having the entrance fee refunded, patients may find their entrance fee tangled up in bankruptcy proceedings.  The Wall Street Journal article links to guides from CARF International (link www.carf.org) and The American Association of Homes and Services for the Aging (link www.aahsa.org). They suggest getting a copy of the facility’s audited financial statements and analyze aspects like the facility’s days of cash on hand and their cash-to-debt ratio.

Readers: Have you or a loved one lived at a CCRC that had financial difficulty, or conversely, was very lucrative?  Do you work in a facility in either category? What do you notice about the ones that are successful – are there traits that other CCRCs can learn from?