The United States Government Accountability Office (GAO) issued a new report examining the risks that consumers face when they buy into a Continuing Care Retirement Community (CCRC). The title of the report is: Continuing Care Retirement Communities Can Provide Benefits, but Not Without Some Risk.
CCRCs offer a range of long-term care services that provide elders housing and health care in a single community as they age. CCRCs residents often pay large entrance fees, in addition to monthly fees. The GAO examined the increasing risk to residents that CCRCs may not be able to meet their obligations due to financial problems. The risks include the possibility that CCRC residents could lose their entrance fees if a CCRC closed or became bankrupt, that residents could face relocation to other facilities due to closure or that residents could face greater-than-expected fees that make the CCRC unaffordable to them.
U.S. Senator Herb Kohl (WI), chair of the U.S. Senate Special Committee on Aging, requested the GAO investigation. At a hearing on the report, he stated: “If these companies are going to take the life savings of seniors, they need to be able to guarantee they’ll be around to provide the lifetime of care they promised.”
CCRCs are not regulated by the federal government but are regulated, to varying degrees, by state governments. The GAO looked at regulatory practices in 8 states, including California, which has 129 CCRCs. According to the GAO, most of the states it examined required CCRCs to submit financial information, but did not conduct financial examinations to assess the viability of CCRCs.
The report noted that a California CCRC closed in 2007 and that the closure was disruptive and traumatizing to residents.
Click here to read the GAO’s summary of the report.
Click here to read the full GAO report.