Senior Housing Overview

In case you missed it the first time, here’s an overview of seniors housing.

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Although there are several options for retirement living in America today, industry standards include:

  • Active adult living: For seniors age 55+ who require no assistance; active adult living generally consists of age-restricted neighborhoods or apartment complexes where residents might pay an association fee but receive no other services
  • Independent living: For seniors age 62+ who require no assistance; independent living is generally offered in either apartment or cottage settings and generally includes meals, housekeeping, and social events
  • Assisted living: For seniors requiring assistance with activities of daily living
  • Memory support/Dementia care: For seniors with cognitive decline due to advances Alzheimer’s or other disease
  • Skilled nursing: For seniors in the end-stage of life who require care 24 hours a day

CCRC’s

Although there are many different types of senior housing communities, a particularly popular arrangement is called a “continuing care retirement community,” (“CCRC”), which includes the following services:

  • Independent living
  • Assisted living/Memory support (generally combined in one wing)
  • Nursing

These communities range in size from 40 independent living units to over 1,000 independent living units, with the industry averaging approximately 150 independent living units per campus. The target demographic is generally seniors age 75 or older.

CCRC’s generally follow an entrance fee model whereby residents pay an up-front entrance fee ranging from $100,000 to $1,000,000 (depending on the community and the size of the apartment or cottage) and a monthly fee ranging from $1,500 to $5,000. The entrance fee is refunded to the resident or the resident’s estate following death or move-out.

This arrangement is unique for several reasons, the most important of which is that it allows the community to offer discounts on health care and other services. Accordingly, most communities consider an entrance fee contract to be a type of long-term care insurance.

Because of the insurance nature of entrance fee pricing, most retirement communities require prospective residents to provide proof that their financial resources meet required thresholds and that they are in good health (a community accepting a resident in poor health and/or with limited financial resources can be obligated to care for that resident for the rest of his/her lifetime.