Deciding to move into a continuing care retirement community (CCRC), also known as a life plan community, is a major life choice that requires careful research and planning. You want confidence that the community you choose will honor its contractual commitments to provide a continuum of care if circumstances change, and that it will remain financially sound. One important question is what kind of oversight exists to ensure CCRCs meet their obligations to residents.
Regulation of CCRCs is handled at the state level. Although federal oversight has been proposed at times, most oversight today is provided by individual states. Currently, 38 states regulate CCRCs through agencies such as the Department of Insurance or divisions focused on aging and elder services. The remaining 12 states and the District of Columbia have no statewide regulatory framework specific to continuing care retirement communities. Wyoming is unique in that it does not have any communities offering continuing care contracts.
CCRC regulation is different from licensure for care services
It’s important to distinguish regulation of CCRCs from healthcare licensure. State regulation of CCRCs typically focuses on financial health and contractual protections, while healthcare facilities inside a CCRC—such as skilled nursing centers or assisted living units—are regulated by state licensing bodies and must meet clinical standards for care and staffing. Facilities that accept Medicare or Medicaid must comply with federal certification rules. These healthcare regulators do not oversee the overall operations or financial management of the CCRC’s independent living segment.
>> Related: How to Analyze the Quality of a CCRC Healthcare Center
What does regulation of CCRCs involve?
The scope and stringency of CCRC regulation vary widely from state to state. Some states require detailed, ongoing financial reporting and set reserve requirements, while others require only basic disclosure or have no regulation at all. For example, North Carolina’s Department of Insurance oversees 59 CCRCs and requires annually updated disclosure statements and audited financials. North Carolina also mandates operating reserves equal to 50 percent of forecasted operating costs for the next 12 months; if a community’s occupancy is 90 percent or higher, the reserve requirement drops to 25 percent. Notably, no CCRC in North Carolina has declared bankruptcy to date.
Other states have looser standards. Some require only voluntary annual disclosures, and a few provide no specific oversight. Ohio, for instance, has around 150 communities that would likely meet the definition of a CCRC, yet the state does not have regulatory oversight specifically for CCRCs. This lack of CCRC-specific regulation does not mean that assisted living or nursing components within Ohio communities are unregulated—those parts are still licensed and inspected by the appropriate authorities.
>> Related: How Do I Know If a CCRC is Financially Viable?
Do CCRCs perform better in regulated states?
There isn’t conclusive research showing that CCRCs in regulated states perform better financially than those in non-regulated states. Because the level of oversight varies so much among regulated states, a simple regulated-versus-nonregulated comparison may not be meaningful. A more useful analysis would compare CCRCs in states with robust financial safeguards, like North Carolina, to communities in states with little or no oversight.
>> Related: The Long-Term Care Ombudsmen Program: Advocating for Seniors
The bottom line for CCRC regulation
Comparing CCRCs across state lines can be challenging because oversight approaches differ widely. There are pros and cons to centralized federal regulation versus state-level control, and opinions vary about which approach would best protect residents. Regardless of the regulatory environment, the most reliable protection comes from doing your own due diligence: review disclosure statements and audited financials, ask about reserve policies and occupancy levels, tour facilities, and speak with residents and local experts. Taking these steps will help you select a community that meets your needs and provides the peace of mind you deserve.