By: Attorney Nathan Simpson
According to a new article in Forbes, Continuing Care Retirement Communites (CCRCs) and Assisted Living Facilities are the least profitable business in the US, turing on average a -1.0% profit margin. While this may simply seem like an interesting fact, it is a fact that could have potentially devastating effects on seniors.
Many CCRCs require seniors, as part of the contract to live there, to agree to spend down all of their money on the cost of the facility. In exchange, the CCRCs will agree to take care of the person, if possible, even after their funds have been exhausted. However, if the CCRC is unable to meet the care needs of the individual, or if the CCRC goes out of business, they are no longer under any obligation. Seniors could be spending their money on an agreement that the CCRC is unable to fulfill.
While many CCRCs are run as non-profits, this still raises grave concerns about their long term viability. If the CCRC is unable to fulfill their end of the bargain, the senior is forced to find a new facility. This can be difficult, as Assisted Living Facilities often refuse to take seniors who have already spent down their assets, and even some Nursing Homes often have long waiting periods for admission.