Senate Aging Committee hearing focuses on possible financial risks associated with CCRCs
Sen. Herb Kohl (D-WI)
Regulation of continuing care retirement communities varies widely from state to state, according to a new report from the Government Accountability Office. The report was released at a Senate Special Committee on Aging hearing on CCRCs.
CCRCs are regulated at the state level to varying effect, the report found. Twelve states do not have any CCRC-specific regulations. Consumer safeguards and protections regarding disclosure, asset reserves, and escrow requirements differ widely. Only 17 states require CCRCs to submit studies that assess their long-term viability, according to the report. Finally, only 294 CCRCs (about 16 percent) are voluntarily accredited by the Continuing Care Accreditation Commission.
The committee also released an investigative report based on the responses received to letters of inquiry sent to five CCRC providers earlier this year. The report found many CCRC ownership structures to be very complex, and that financial troubles at any level can have real consequences for individual residents.
Witnesses at the hearing discussed the financial stability and risks to consumers who invest in CCRCs. Charles Prine, a former resident at Concordia of the South Hills CCRC in Mt. Lebanon, PA, told the committee that when his CCRC went bankrupt, he and his fellow residents lost their refundable entrance deposits. Kevin McCarty, Insurance Commissioner with the Florida Office of Insurance Regulation, testified that no CCRC has failed in his state in 20 years, due in part to the regulatory oversight system they have in place.
"CCRCs offer a range of services and amenities for many elders, but it is important that they and their families understand how entry fees and refunds work,” Larry Minnix, president and CEO of the American Association of Homes and Services for the Aging, said in a statement. “The retirement community model is most successful when transparency and disclosure are at the forefront.”