(NaCCRA)
CCRC Resident Self-Reliance and Equity Standards
The implicit promise of the Continuing Care Contract is that it enables a resident or other participant to provide for the contingent costs of aging without becoming a burden on family, friends, charity, or governmental welfare. This is a desirable public benefit purpose.
Nonprofit CCRCs conform with Internal Revenue Service (IRS) Ruling 72-124, which states in part "First, the organization must be committed to the established policy, whether written or in actual practice, of maintaining in residence any persons who become unable to pay their regular charges. This may be done by utilizing the organization's own reserves, seeking funds from local and Federal welfare units, soliciting funds from its sponsoring organization, its members, or the general public, or by some combination thereof."
Many investor-funded, for-profit CCRCs provide this same assurance on a voluntary or contractual basis.
Although this would seem to provide the needed assurance that residents will be able to avoid becoming a burden on others, and most providers evidently meet the standard without prodding, there is ambiguity that affects the willingness of providers to give unqualified support and undermines the ability of residents to rely on the assurance of life long support. This has led to ambivalent contract language and mutual mistrust. Some providers also require residents in some instances to have family or other guarantors to shield the CCRC from this continuation burden.
From the provider perspective elder law practices have evolved in recent years counseling families and older people about how to divest themselves of assets so that they can qualify for Medicaid long term care benefits under the Federal "spend down" standards. This also impacts providers and increases their charitable burden to maintain in residence people who outlive their assets.
Residents, on the other hand, are subject to being held to have disqualified themselves for continuance protection if they are found to misspent funds that they should have husbanded to meet prospective provider fees. This can lead residents to avoid expenditures, fearing that a vacation or family visit might be found to be excessive spending depriving them of this crucial protection.
The only response that seems available in the current context is for there to be a standard for what constitutes sufficient funds for a resident to be found to have acted responsibly in the residents contractual relationship with the provider. To advance that end we offer here the Financial Responsibility Standard.
NaCCRA Web Site
Financial equity in internal transfers is also an issue with some CCRCs in which residents who move from one unit to another are credited only with what they paid for the unit they relinquish while the provider is then able to remarket that unit at current market prices. This issue is addressed in the context of Transfer Standards.
Residents whose life circumstances change so that they have to leave a CCRC before death should not have to forfeit an investment greater than the value of the services that they have been provided. In other words departing residents should not be expected to financially support continuing residents. Nonforfeiture standards can address this source of inequity.
Beyond these concerns there is also a need for intergenerational equity so that initial residence in a CCRC is not underpriced, resulting in a deferred financial shortfall, requiring later generations of residents to make up the difference.
This inequity is best addressed by encouraging CCRC executives to follow sound financial practices in the management of these communities and the services that they provide. The requirement that CCRCs hold a designated liability item for the unexpended value of Prepaid Medical Expenses reported to residents as tax deductible is but one step in that direction.
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