Recently, I spoke with a group of prospective residents at a life plan community (also called a continuing care retirement community or CCRC) in California. As usual, I walked the audience through the key points of a senior living decision: understanding the options and trade-offs, financial considerations, contract structures, healthcare, and more.
During the Q&A, an audience member thanked me for the helpful information and then asked my advice for breaking down the process of evaluating a life plan community into more manageable pieces to more easily compare one community to another. I thought it was a wonderful question and one worth writing about for our blog.
Evaluating a life plan community
Every life plan community is different, offering residents unique lived experiences. During my years visiting hundreds of communities, I have found there are five primary components of a life plan community that prospective residents should understand and consider as part of their research, evaluation, and due decision process:
- Floorplans, amenities, and services
- The CCRC contract
- Evaluation of healthcare services
- Financial and organizational management
- Community culture and resident involvement
Let’s take a closer look at each of these areas individually…
Floorplans, amenities, and services
This is the fun part of the process and probably the most self-explanatory. Be sure you think not only about what you need today but also what will work for you several years from now. Start by looking at the actual housing options: What floorplans are available? Are there apartments, cottages, or other types of residences? How large are they, and what features are included? Are refurbishments provided at move-in (like new paint or drapes), and can custom upgrades can be done? If so, how does this work financially?
Then look beyond the residence itself. What services and amenities are included in the monthly fee and which ones cost extra? Consider dining, housekeeping, transportation, fitness and wellness programs, maintenance, activities, technology, guest accommodations, and other services that are important to your lifestyle. If you have particular interests or hobbies, find out whether the community has the spaces, equipment, and programs to support them.
It is also worth considering how easy the community is to navigate. Are there convenient walking routes? How accessible are dining venues, common areas and healthcare services from the residence you are considering? If you eventually need to use a wheelchair, walker, or other mobility aid, will the layout still work well?
But there are a few other important details to pay attention to as well; sometimes things can make a big difference. For example, before committing to a particular apartment or home in the community, it helps to check things like water pressure in the shower or how the sun comes through the windows in the afternoon. I’ve stayed in enough guest suites over the years to have experienced these things firsthand. It always makes me wonder how I would feel if I had gone through all the steps and made the financial commitment, only to find out the water doesn’t get very hot. Sure, it can probably be fixed, but it’s better to think about all the little things in advance.
>> Related: Finding Your Happy Place: Tips for Choosing a CCRC Residential Unit
The CCRC contract
It’s critical that potential residents of a CCRC or life plan community understand the details of their contract before signing. After all, this is a housing, lifestyle, healthcare, and financial decision all wrapped up into one.
The main thing is to be sure you understand the contract’s financial model (i.e., type of residency contract), details and stipulations around things like entry fee refunds, and responsibilities for both the resident and the organization. You should also understand exactly what future healthcare benefits are included in your contract and what you will pay if you eventually need assisted living, memory support, or skilled nursing care.
Pay close attention to how monthly fees can change over time, as well. Ask about any provisions governing future increases and whether healthcare-related charges are treated differently from the monthly fee for independent living. Also ask what happens if you move from independent living to another level of care. Will you continue paying your independent living rate, or will your monthly fee change? Are there additional fees for specific services?
For communities that have one, the CCRC entrance fee deserves particular attention. If a portion is refundable, understand exactly how the refund is calculated, when it becomes payable, and whether it depends on resale of your residence or other circumstances. A “refundable” entrance fee does not necessarily mean the money will be returned immediately when a resident leaves.
In other words, don’t simply compare the entrance fee and monthly fee from one community to another. Compare what you are actually receiving in exchange for those fees and what your financial obligations could look like if your needs change. And because these contracts can be lengthy and complex, this is an area where getting professional advice from an experienced attorney and financial planner is definitely worthwhile.
>> Related: A Primer on CCRC Residency Contracts
Evaluation of healthcare services
Most of us hope we won’t ever need long-term care, but the reality is that many people will, and some for longer than others. One reason people choose a life plan community is the peace of mind that comes with knowing the care services that may be needed are available where you live. But this also means you want to be sure it’s comprehensive and high-quality care.
Start by understanding exactly what levels of care are available. Does the community offer on-site assisted living and skilled nursing care or are these services provided at a separate location? What about rehabilitation services? Is there a dedicated memory care neighborhood, or is memory support provided within assisted living? Be sure to learn about the differences between the two and what it could mean later. If there is a separate memory care area, what additional services, staffing, or security features does it provide? These distinctions matter because “memory care” does not have one uniform definition nationwide.
Ask what happens if a resident’s care needs become more complex. Are there medical or functional criteria that could require someone to move to a care setting? Is there a waiting list for higher levels of care? How are transfers prioritized? And, importantly, does the CCRC’s contract guarantee access to care, or simply provide access to services that are subject to availability?
Then evaluate quality, not just availability. Talk with the director of nursing or other healthcare leaders. Ask about staffing levels, staff turnover, credentials, and the use of agency staff. Find out whether physicians, nurse practitioners, therapists, and/or other healthcare professionals regularly serve residents on campus.
For communities with Medicare-certified skilled nursing facilities, prospective residents can also use the federal Medicare Care Compare tool to review health inspections, staffing, and other quality measures. Your state’s long-term care ombudsman is another resource for information on healthcare quality.
The key is to look beyond the brochure’s list of healthcare services. You want to understand how those services actually work and whether they are likely to meet your needs if your health changes.
>> Related: Evaluating Care, Quality, and Access at a CCRC’s Healthcare Center
Financial and organizational management
A life plan community is not simply a place where you live. It is an organization that has made a long-term financial commitment to residents to maintain a campus, provide services, and manage healthcare operations. That makes the financial health and management of the organization an important part of your due diligence.
Prospective residents should ask to review the community’s financial disclosure materials and audited financial statements where available. Look at trends rather than focusing on a single year’s numbers. How has occupancy changed? Is the organization generating sufficient operating income? How much debt does it carry? Does it have adequate liquidity and reserves? What major capital projects are planned, and how will they be financed?
Also consider who operates the community and how it is governed. Is it part of a larger organization with multiple communities or healthcare operations? Who sits on the board? How experienced is the leadership team? How long have key executives been with the organization? Is it a for-profit or nonprofit organization? None of these factors tells you everything you need to know, but together they can provide important context.
Accreditation can be another piece of the puzzle. CARF International, an independent nonprofit accreditor, evaluates life plan communities against standards that include areas such as leadership, quality, financial planning, strategic planning and risk management. CARF-accredited CCRCs also submit audited financial information for review of financial ratios, including measures related to liquidity and capital structure. But note that CARF accreditation still isn’t a guarantee of financial stability, and just because a CCRC is not accredited isn’t necessarily bad. It’s a voluntary and costly process. Some providers simply choose not to do it even if they are doing all the right things.
In some cases, state regulatory agencies can also provide useful information. Requirements vary by state but may include financial disclosures, feasibility studies, reserve requirements, and periodic financial or operational reviews.
You don’t have to become a financial analyst to do this research. The goal is to understand whether the organization appears to be well-managed and financially positioned to fulfill its long-term obligations to its residents. For a significant financial commitment, it may also make sense to have your own financial advisor review the data with you.
>> Free Guide to Evaluating the Financial Viability of a CCRC
Community culture and resident involvement
Finally, there is something that cannot be captured very well in a financial statement or contract: What does it actually feel like to live there? This is where “fit” becomes particularly important. Two communities can offer similar floorplans, amenities, healthcare services, and contract structures but feel completely different to the people who live there.
This is why it’s wise to spend enough time on campus to get a true sense of the culture. Talk with residents when staff members aren’t standing nearby. Ask what they like about living there … or what they would change. Ask how residents and management communicate with each other. Find out whether residents have meaningful opportunities to provide input and whether the administration appears to listen when concerns are raised.
You can learn a lot by participating rather than simply touring. Attend a lecture, fitness class, social event, or meal. If possible, visit more than once and at different times of day. Some communities may even offer overnight stays or guest accommodations, which can give you an entirely different perspective than a two-hour sales visit.
Look for the little social cues, too. Do residents greet one another? Do people seem engaged in activities? Are there opportunities to form friendships based on shared interests? Do residents appear to have a voice in community life? These questions matter because social connection is an important part of healthy aging.
Perhaps most importantly, pay attention to how you feel while you are there. This would be your home, after all. Can you picture yourself becoming part of this community? Can you imagine your spouse or partner feeling comfortable there? Would you be likely to participate in the activities, meet people, and develop friendships?
>> Related: How Do I Know If I’ll Be Happy Living in This CCRC?
Putting the pieces together
The process of selecting a life plan community can feel overwhelming because there are so many individual details to consider. Breaking the decision into these five categories can make the process more manageable and help you compare communities more objectively.
Think of the process as looking at five pieces of the same puzzle: the residence and lifestyle, the contract, healthcare, financial and organizational strength, and community culture. A community needs to make sense across all five areas because moving to a life plan community is a long-term decision, not simply a choice about where you want to live today.
And remember that there is no need to make the decision based on a single tour or presentation. Take your time. Ask questions. Review the documents. Talk with residents. Visit more than once. And when the financial or contractual details become complicated, seek advice from professionals who can help you understand how the decision fits into your particular circumstances.
The goal isn’t simply to find a community that looks good on paper. It is to find a place where the lifestyle, contract, healthcare resources, financial structure, and community culture align with what you value, and where you can envision yourself living for many years to come.
