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'The Last House I'm Gonna Have': The Continuing Care Option For Seniors

As more Baby Boomers reach retirement age, and more retirees choose North Carolina as a destination, the state’s population of residents age 65 and older is growing. The figure increased by 335,000 between 2010 and 2016, according to U.S. Census Bureau data reported by the Carolina Population Center at the University of North Carolina.

This trend is creating an ever-increasing demand for senior care services and communities.  Some retirees choose a Continuing Care community, where lifetime care is provided, as residents age and healthcare needs change. 

Such developments are growing in the Charlotte area. Seniors and their families who are considering this option need to understand not only the advantages but also the financial and other terms of joining a continuing care community.

In Matthews, construction is continuing on a 60-acre site carved out of former farmland. Windsor Run is a new retirement community, owned by Maryland-based Erickson Living. The development’s first phase features more than 200 independent living apartments. 

Erickson also plans to build assisted living, skilled nursing, and memory care facilities at Windsor Run, creating what is commonly known as a Continuing Care Retirement Community (CCRC). 

Sara Klemmer and her Golden Retriever, Josie, will move to east Charlotte retirement community in December.

The concept appeals to Sara Klemmer, who has lived in Charlotte’s Plaza Midwood neighborhood for 31 years. Her husband died 11 years ago. Klemmer is now in her early 70s and active. She loves her neighborhood and doesn’t want to leave it. But she also doesn’t want to keep taking care of her house or have to move from one senior facility to another, if she needs more care in the future. 

So Klemmer has put her house on the market and plans to move in December into a brand new unit at Aldersgate, a continuing care community in east Charlotte. "If I get sick, there's a place there I can recuperate," Klemmer said.

Assisted living facilities are also available on site.

"I expected to be taken out of here [her Plaza Midwood home] in a box," Klemmer adds. "But now I'm gonna be taken out of there in a box."

Aldersgate is completing an $85 million expansion. And on another side of town, the Southminster continuing care community is also expanding and renovating, to the tune of $120 million. "There's strong demand," says Stewart Wiley, Southminster's sales and marketing director. "You're seeing that visually in the number of communities that are being built or the expansions that are going on."

The website SmartAsset, using census data, reports that in 2016, North Carolina was the third most popular destination for retirees who were moving to a new state. South Carolina ranked fourth. The National Investment Center for Seniors Housing and Care says that since early 2015, 872 new units in independent living and continuing care communities have come online in the Charlotte metro region.

Along with a full spectrum of care, many such communities offer an array of amenities, like swimming pools and banking services. Such developments also require hefty upfront payments referred to as entrance fees.  

"Typically speaking, the entrance market ranges from the low six figures — $150,000 to $180,000 — all the way up to many hundreds of thousands of dollars," said Steven Maag, who works at Leading Age, an association that represents senior care providers. Variables that affect the size of the entrance fee include the size of the housing unit and services offered by the CCRC.

At Aldersgate, for example, moving into a 1,376 square foot apartment in the community’s newest units requires a minimum entrance fee of $312,591.  The maximum entrance fees at Aldersgate is more than $500,00. At Southminster, the fees range from under $100,000 to more than $800,000.

And then there are the monthly fees for living in a continuing care community. They cover the housing itself, maintenance, and typically at least some meals and services like housekeeping and transportation. In the Charlotte area, monthly fees range from about $2,000 to nearly $5,000.

Incoming residents sign a contract with the continuing care provider. In some cases, residents pay a higher entrance fee in exchange for guaranteed stability in monthly fees even if more medical care is needed later on. Other contracts feature lower entrance fees, but monthly charges go up as health care needs increase.

"It comes down to assigning who's gonna have the risk of the future cost of health care," Maag said. 

Entrance fees may be non-refundable or partially-refundable, with terms spelled out in the resident's contract. Experts stress that consumers should carefully review a CCRC contract before signing it, and have an accountant or lawyer do the same, to make sure the financial terms are understood. 

One question to consider is what portion, if any, of an entrance fee would be refunded to a resident who decides to terminate their contract and move out — or to the estate of a resident who dies. A contract may provide, for example, a partial refund on a declining basis over the first several years of the agreement. Some contracts are designed with a 50 percent or 90 percent refund provision.

In addition, "there might be some fees you would lose," says Hillary Kaylor with the Centralina Area Agency on Aging. "It just kind of depends on what you agreed to up front."

Seniors should also understand how future decisions about their health care needs would be made, according to Brad Paulis with an independent accrediting commission known as CARF. For example, Paulis says, "What happens if you need care? Who makes the decision, in terms of transferring to a higher level of care?" 

Except for any Medicare or Medicaid-funded services, continuing care communities are not regulated by the federal government. Most states do provide some oversight. North Carolina’s Department of Insurance licenses providers and requires them to file an annual disclosure statement including financial information. At the end of 2017, for example, Charlotte’s Southminster community reported cash-on-hand of a little under $1.3 million.

For Sara Klemmer, the decision to leave the neighborhood she loves makes sense financially and logically, but still, she says it’s been emotionally “wrenching.” And, the notion of joining a continuing care community, is a psychological adjustment, too.

"This is the last house I'm gonna have, the last apartment, " Klemmer said. "You come face to face with your mortality." 

As the nation’s wave of Baby Boomers continues to roll into retirement, more and more seniors will be pondering such realities. Many will also face challenging decisions about what kind of senior care environment fits their preferences, and their budget.

Mark Rumsey grew up in Kansas and got his first radio job at age 17 in the town of Abilene, where he announced easy-listening music played from vinyl record albums.