Friendship Village Declares bankruptcy

[Koolau]

The Class A Life Care CCRC I am moving into requires an admission fee of around $400,000 to $1,000,000 depending on the size of the residence. It is not a "deposit" because it is not refundable after the first 5 years. It is the best around with a waiting list of 7 to 17 years depending on the residence you want. A large portion of the admission fee (about 50%) is considered a medical expense, deductible on income taxes. This is the type of CCRC where your monthly cost does not increase when you move into a higher level of care. I consider the admission fee to be like a type of long term care insurance.

I can buy a condo on the beach for that kinda money - or less. Of course, the lease expires in maybe 14 years. Then the condo more or less turns into a pumpkin. (Heh, heh, I'll likely expire before then.)

 

[gauss]

I haven't studied this too much, but I am having trouble seeing an advantage of this and the CCRC concept over a facility that has independent/assisted living/ memory care in a single location.

Where Mom lived, there was a one-time $1500 "community fee" that was due on move in but after that it was monthly pay as you go. Transitioning to assisted living / memory care would have increased the monthly rate.

Do the CCRC's with the large buy-in's have a constant(time-adjusted) monthly fee regardless of the amount of care needed? If not, I don't see the advantage. Maybe it is a regional thing.

-gauss

 

[athena53]

The more I think about it, I can't think of any purpose for fully refundable fees with no time limit except a little interest income on the cash reserves OR a piggy bank the facility can raid when they need it. As someone posted earlier, if the fee is truly 100% refundable for any reason (you relocate to be near kids who moved, you're unhappy, you died and it goes to your heirs) it should be locked up in an escrow account. Otherwise it's the scary piggy bank scenario.

I'm 70 so hopefully nowhere near needing to make these decisions and these discussions are very helpful.

 

[harllee]

I haven't studied this too much, but I am having trouble seeing an advantage of this and the CCRC concept over a facility that has independent/assisted living/ memory care in a single location.

Where Mom lived, there was a one-time $1500 "community fee" that was due on move in but after that it was monthly pay as you go. Transitioning to assisted living / memory care would have increased the monthly rate.

Do the CCRC's with the large buy-in's have a constant(time-adjusted) monthly fee regardless of the amount of care needed? If not, I don't see the advantage. Maybe it is a regional thing.

-gauss

The CCRC I am moving into next month has a large entry fee and a monthly fee but it is a "Life Care" Class A CCRC so if I have to move from independent living to a higher level of care such as skilled nursing or memory care the monthly fee stays the same (with inflation adjustments). In effect I am prepaying for the higher level of care. I look at it like a Long Term Care Insurance policy but much better.

 

[harllee]

The more I think about it, I can't think of any purpose for fully refundable fees with no time limit except a little interest income on the cash reserves OR a piggy bank the facility can raid when they need it. As someone posted earlier, if the fee is truly 100% refundable for any reason (you relocate to be near kids who moved, you're unhappy, you died and it goes to your heirs) it should be locked up in an escrow account. Otherwise it's the scary piggy bank scenario.

I'm 70 so hopefully nowhere near needing to make these decisions and these discussions are very helpful.

if you are interested in a CCRC don't wait too long! I am 72 and am moving into a CCRC next month and just went through all the admission requirements--financial, health and cognitive. I thought the cognitive test was hard. DH barely passed the medical--he had to go before the admissions committee to answer many questions (he has psoriatic arthritis and they wanted to make sure he could live independently). We know several people who were turned down when they wanted to get in--they waited too long. As they say, it is better to go into a CCRC 5 years too early than to try to get in one day too late. In addition there is the issue of the wait list. We had been on the wait list for our unit for over 10 years and now the wait list is even longer.

 

[gauss]

The CCRC I am moving into next month has a large entry fee and a monthly fee but it is a "Life Care" Class A CCRC so if I have to move from independent living to a higher level of care such as skilled nursing or memory care the monthly fee stays the same (with inflation adjustments). In effect I am prepaying for the higher level of care. I look at it like a Long Term Care Insurance policy but much better.

Thank you for clarifying.

-gauss

-

 

[Koolau]

The more I think about it, I can't think of any purpose for fully refundable fees with no time limit except a little interest income on the cash reserves OR a piggy bank the facility can raid when they need it. As someone posted earlier, if the fee is truly 100% refundable for any reason (you relocate to be near kids who moved, you're unhappy, you died and it goes to your heirs) it should be locked up in an escrow account. Otherwise it's the scary piggy bank scenario.

I'm 70 so hopefully nowhere near needing to make these decisions and these discussions are very helpful.

If you are seriously considering a CCRC, you probably need to apply and be evaluated while you are "young." Most exclude certain conditions.

 

[Act2]

My parents moved to a CCRC and it was great. It was a Type A - large deposit, the facility had the use of the funds, 90 % was returned to the estate when the second of them died (but with no interest). We had to wait for the return of the deposit for about 9 months because it was dependent upon a new person moving in, in order behind others who had passed away or moved out. And because it was during Covid the move-ins were less frequent than the deaths/move outs, which had not been the case before. Plus the facility was going through a restructuring bankruptcy.

We did not lose the deposit and we were not in urgent need of a fast return. And the facility provided a great lifestyle and good care and amenities, and we as beneficiaries never thought of it as ‘our’ money until we had it in hand and we didn’t begrudge that. Even if we had not gotten it back, our parents had a wonderful last few years there and it was their money.

I wish I could have foreseen the bankruptcy, but the company emerged ok and there was no significant disruption (plastic flowers instead of fresh in the dining room was all I noticed as a cost-cutting measure).

I plan on a similar community for my own later years.

 

[slowsaver]

This is disturbing, because I had thought the not-for-profit places were less likely to go under. Otoh, the place I was looking at does not refund your deposit, unless you move out before 2 years. I hope the non-refundable places are more immune to bk.

Many people mentioned long waiting lists (e.g. 10 years) - Do you take the cognitive and health entry tests at application time, or at admission time? Seems like those things could go downhill a lot during the 10 years you're on the waiting list! If you apply at 70, then have to take the tests at 80 -- ouch!

 

[KarenF]

Wow- those are scary articles. My plan had been to move to a CCRC near DS and DDIL in Des Moines but I may instead look for a "one-stage" place that fits whatever needs I have at the time and seek LTC later and pay month-by-month if I get to that point.

I am also not sold on CCRCs and plan to do a stage at a time with my Long Term Care insurance, which covers in home care.

 

[harllee]

I am also not sold on CCRCs and plan to do a stage at a time with my Long Term Care insurance, which covers in home care.

I am having to battle with my 90 year mother's Long Term care insurance company to get them to pay. I hope you have some smart young person (preferably a lawyer) named as your POA to do battle with your long term care insurance company when they refuse to pay.

 

[slowsaver]

I am having to battle with my 90 year mother's Long Term care insurance company to get them to pay. I hope you have some smart young person (preferably a lawyer) named as your POA to do battle with your long term care insurance company when they refuse to pay.

Stories like these are exactly why the CCRC route needs to work for me. I have no kids.

 

[harllee]

Stories like these are exactly why the CCRC route needs to work for me. I have no kids.

Same here, but just because person has children does not mean that one of them will be able to put on the hours and hours needed to try to get a LTC insurance company to pay.

 

[Koolau]

Same here, but just because person has children does not mean that one of them will be able to put on the hours and hours needed to try to get a LTC insurance company to pay.

I know what you are saying. My mom's LTC company was very cooperative and helpful (nice, even) but I did have to call them occasionally about some aspect of the benefits (mostly so I would understand.) A lot of people don't have kids to do that for them. I wonder if care facilities (looking after their own interests, perhaps) have patient advocates to take care of such things.

Because there are such issues, I would like to see a LTCi financed advocate office for folks to be able to launch appeals. Wouldn't that chap their behinds to have to pay for an advocacy group who's only j*b was to make them pay up? Love it.

 

[slowsaver]

Same here, but just because person has children does not mean that one of them will be able to put on the hours and hours needed to try to get a LTC insurance company to pay.

Good point. You can't expect your kids to take care of you. You can't trust LTC insurance to pay-up. You can't trust CCRCs to not go bankrupt.

 

[KarenF]

I am having to battle with my 90 year mother's Long Term care insurance company to get them to pay. I hope you have some smart young person (preferably a lawyer) named as your POA to do battle with your long term care insurance company when they refuse to pay.

Our son is a lawyer so we are prepared ��

 

[Koolau]

Good point. You can't expect your kids to take care of you. You can't trust LTC insurance to pay-up. You can't trust CCRCs to not go bankrupt.

Heh, heh, you can't trust anyone if you really think about it - at least unless you've had some good experiences with them.

 

[Sunset]

This is disturbing, because I had thought the not-for-profit places were less likely to go under. Otoh, the place I was looking at does not refund your deposit, unless you move out before 2 years. I hope the non-refundable places are more immune to bk.

.....

I think bad management can bankrupt any business if they try hard enough

 

[Koolau]

This is disturbing, because I had thought the not-for-profit places were less likely to go under. Otoh, the place I was looking at does not refund your deposit, unless you move out before 2 years. I hope the non-refundable places are more immune to bk.

Many people mentioned long waiting lists (e.g. 10 years) - Do you take the cognitive and health entry tests at application time, or at admission time? Seems like those things could go downhill a lot during the 10 years you're on the waiting list! If you apply at 70, then have to take the tests at 80 -- ouch!

I think the whole not-for-profit thing is a scam. Most hospitals are NFP and they generally charge more for the same thing than the for profit hospitals. It's been a while, but I saw a whole study on that some years back. The NFPs tend to spend more on administration, buildings and "moving."

My home town had two NFP hospitals. BOTH upgraded EVERY room to the standard of the day. Then they merged and tore down the old hospitals and built new. Because of the merge, every piece of "cloth" had to be dumped and replaced because now, the stenciled or badged "cloth" was all wrong. "Our Blessed Virgin Hospital" would not do on linens, gowns, scrubs, etc. whose new name was now "Amalgamated Podunk Hospital."

An enterprising woman I know made arrangements to take all the old stuff and not let it be landfilled. She was able to ship 13 tons of the stuff to african mission hospitals. They could care less what it said on their scrubs and sheets.

I'm guessing the cost of all this messing around was in excess of $100 million dollars. They had to use up all the extra money they receive as they are, after all, NFP!

 

[zippy2020]

I am also not sold on CCRCs and plan to do a stage at a time with my Long Term Care insurance, which covers in home care.

You should not make all your eldercare plans on that premise. Home care does NOT cover important issues like critical care situations where a licensed professional has to provide care.

Homecare health aides are for helping with ADLs. They are not licensed for, nor allowed to, perform medical procedures. They cannot draw blood nor give injections, as the simplest example; they seldom have the level of training of even a novice EMT.

 

[Sunset]

I think the whole not-for-profit thing is a scam. Most hospitals are NFP and they generally charge more for the same thing than the for profit hospitals. It's been a while, but I saw a whole study on that some years back. The NFPs tend to spend more on administration, buildings and "moving."

My home town had two NFP hospitals. BOTH upgraded EVERY room to the standard of the day. Then they merged and tore down the old hospitals and built new. Because of the merge, every piece of "cloth" had to be dumped and replaced because now, the stenciled or badged "cloth" was all wrong. "Our Blessed Virgin Hospital" would not do on linens, gowns, scrubs, etc. whose new name was now "Amalgamated Podunk Hospital."

An enterprising woman I know made arrangements to take all the old stuff and not let it be landfilled. She was able to ship 13 tons of the stuff to african mission hospitals. They could care less what it said on their scrubs and sheets.

I'm guessing the cost of all this messing around was in excess of $100 million dollars. They had to use up all the extra money they receive as they are, after all, NFP!

It doesn't mean they will charge less, but their motivation for charging could be different.

So patients got nicer rooms, instead of the CEO getting larger bonuses and shareholders getting fat divs.

Many not-for-profit and non-profit organizations make a lot of profit, as the whole non-profit thing just has to balance out after many years.. Some still pay their CEO's exorbitant salaries of millions of dollars for a charity

 

[brett]

At the end of the day salaries/total compensation for staff and executives have to be competitive.

A not for profit institution needs top flight executives just as much as a for profit does. They need to pay market rate. That includes bonus money as appropriate.

 

[mickeyd]

When we moved to our CCRC 4 yeas ago I carefully checked their financials, and still review them semi-annually. So far so good. A lot can go wrong financially with a CCRC, like any large organization. Ya gotta keep um on their toes!

 

[Koolau]

It doesn't mean they will charge less, but their motivation for charging could be different.

So patients got nicer rooms, instead of the CEO getting larger bonuses and shareholders getting fat divs.

Many not-for-profit and non-profit organizations make a lot of profit, as the whole non-profit thing just has to balance out after many years.. Some still pay their CEO's exorbitant salaries of millions of dollars for a charity

Our NFP hospitals even had the gaul to put on money making fairs over the years. They would brow beat and shame all the major empl*yers in the area to cough up tens of thousands of dollars. There were money making games for the kiddies and over priced food for sale, etc. The local radio/TV stations pushed the things hard. IIRC, raising a Mil was not uncommon - mostly from businesses.

Then I watched these "entities" pi$$ away multiple millions on all kinds of worthless changes - isolating themselves from those they served by building ivory palaces with fancy atria and multiple conference rooms miles from the population center. What a total scam!

 

[NoiseBoy]

I haven't studied this too much, but I am having trouble seeing an advantage of this and the CCRC concept over a facility that has independent/assisted living/ memory care in a single location.

In my area, most of the newer LTC facilities offer assisted living plus memory care units. They do not offer skilled nursing care. These facilities can't take Medicare patients who are rehabbing a joint after replacement surgery, but neither are they required to take Medicaid patients. The complication you can run into, by choosing a non-CCRC facility is if you, or a loved one, reaches a point where they require more help than what the assisted living facility will provide, you may have to move.

What does that mean? Well, I'm not an expert and it's been a few years now since we dealt with Dad's facility, but I can share one example. There was a resident in Dad's assisted living facility who was heavy and used a motorized scooter to get around. He looked relatively young to me, maybe early 70s, but one day he was gone. The story I heard is that his weight reached a point where the CNAs could no longer safely help him with his daily needs. A "one-person assist" might be the term. Contrast that with the powered "crane" I saw at the nursing home where Mom was recovering from a UT infection. A CCRC comes with a promise, I presume, that you will be able to stay no matter what, but assisted living means that you have to retain some level of ability to care for yourself. Memory loss issues excepted.

The line is pretty gray. Dad was in the hospital for an infection and they suggested moving him to a nursing home. But the nurse for Dad's assisted living facility came to the hospital and said that they would take him back. He was 98 and wheelchair bound at this time, but probably weighed <150lbs. Did they like Dad? Did they like Dad's money? Whose to say, but we were all happy to move him back to a place where he was comfortable and had his things around him.