Continuing care retirement communities plan to raise their monthly fees for existing independent living residents an average of 3.1% in 2018, according to a recent poll of 160 chief financial officers of not-for-profit senior living communities and financial professionals by specialty investment bank Ziegler.
The median increase at CCRCs, also known as life plan communities, has been 3% for the past five years, Ziegler said. Over that time, the highest average increase, 3.16%, occurred in 2015, and the lowest, 2.94%, occurred in 2013. The average in 2017 was 3.12%.
When answers regarding planned increases for 2018 were broken down by predominant contract type, Ziegler found that communities with type A, B or C contracts are planning slightly lower figures compared with the 2017 predictions (3.02%, 3.19% and 3.11%, respectively), whereas communities with rental contracts are planning higher increases (3.15%).
By far, respondents said labor costs were the primary driver behind the rate increases, with 126 respondents mentioning that factor. Other drivers mentioned included inflation (18), increasing food costs (13) and the increasing cost of healthcare benefits (12).
The most common type of contract offered by respondents’ companies is the type C contract, also known as a fee-for-service contract, with 35.8% of respondents indicating that that type of contract is primarily offered to residents within their organization. They were followed by type A (34%), also known as a life care contract; type B (21.4%) also known as a modified fee-for-service contract; and rental (8.8%) contracts.
For more information, see the poll results.