A ccrc entry fee is the large upfront payment most continuing care retirement communities charge before a new resident moves in. Families often see it as the price of a lifetime housing and care plan. However, many people assume Medicare will help cover part of it, and it will not.
Original Medicare and Medicare Advantage plans do not pay for housing, entry fees, or monthly service fees. They also cover very little long-term custodial care. As a result, knowing how a ccrc entry fee works matters a lot. It affects your savings, your future Medicaid eligibility, and how you will pay for care as your health changes.
What a CCRC Entry Fee Covers and What It Does Not
Continuing care retirement communities, also called life plan communities, offer several levels of living on one campus. Residents usually start in independent living. Later, they can move to assisted living, memory care, or skilled nursing as their needs grow. There are roughly 1,900 to 2,000 of these communities across the United States. Most are nonprofit, though for-profit operators are growing.
The entry fee buys you a contract. It does not buy real estate in most cases. Instead, it prepays part of your future care and secures your place in the community. Fees vary widely by region, unit size, and contract type. They are often several times higher than the monthly fee. Coastal metro areas typically cost far more than rural markets. Couples usually pay a second-person fee on top of the base amount.
Medicare’s role is narrow. Part A covers up to 100 days of skilled nursing facility care per benefit period. That coverage only applies after a qualifying inpatient hospital stay of at least three days. Days 1 through 20 have no coinsurance. Days 21 through 100 carry a daily coinsurance amount.
After day 100, Medicare pays nothing. Medicare.gov is clear that custodial care, such as help with bathing and dressing, is not covered when it is the only care you need. So if a CCRC has a Medicare-certified skilled nursing wing, Medicare may pay for a short rehab stay there. It will not pay for the entry fee, your apartment, or long-term custodial care.
Contract Types, Refund Options, and How They Change the Cost
The type of contract you sign shapes both the upfront cost and your long-term risk. Industry groups such as LeadingAge and CARF International describe three main contract types. Some communities also offer rental options with no large upfront payment. The table below compares them.
| Contract Type | Entry Fee Level | Future Care Costs | Best For |
|---|---|---|---|
| Type A (Life Care / Extensive) | Highest | Monthly fee stays largely the same as care needs increase | People who want predictable costs and expect to need care |
| Type B (Modified) | Moderate | A set amount of care is included; extra care is discounted | People who want some protection at a lower upfront price |
| Type C (Fee-for-Service) | Lower | Residents pay market rates for higher levels of care | People in good health or with long-term care insurance |
| Rental | Little or none | Pay as you go; often no priority access to care | People who want flexibility over guarantees |
Refund structure matters just as much. A non-refundable or “declining balance” contract typically amortizes the fee over a set period. For example, a community might reduce the refund by 2% for each month of residence. After about four years, nothing would be left to refund. Refundable contracts often return 50%, 75%, or 90% of the fee to you or your estate. However, the higher the refund percentage, the higher the upfront ccrc entry fee usually is. Many refundable contracts only pay out after your unit is resold to a new resident. That can delay the refund by months.
Taxes are another factor. The IRS allows a portion of an entry fee to count as a medical expense in some cases. IRS Publication 502 covers this rule. The community calculates the portion tied to medical care, usually based on its actual costs. You can deduct medical expenses only above 7.5% of your adjusted gross income, and only if you itemize. Ask the community for its annual medical expense percentage letter. A tax professional can confirm how it applies to you.
Steps to Take Before You Sign
Start with the community’s finances. A CCRC is a long-term promise, and the promise is only as strong as the operator. Request audited financial statements for the last three to five years. Look at occupancy rates, debt levels, and cash reserves. Many states require CCRCs to hold reserves and file disclosure statements. Roughly 38 states regulate CCRCs in some form, often through the state insurance department. Some states, however, offer little oversight. Check whether your state regulator has any complaints or actions on file.
Next, read the contract closely. Pay attention to these points:
- Refund terms: When is a refund paid, and does it depend on resale of the unit?
- Monthly fee increases: How much have fees risen each year over the past decade?
- Health screening: What health conditions could block admission?
- Transfer rules: Who decides when you move to assisted living or nursing care?
- Medicare certification: Is the skilled nursing unit Medicare-certified so Part A can cover rehab stays?
- Accreditation: Is the community accredited by CARF?
Then think about Medicaid. Medicaid has a 60-month look-back period for asset transfers in most states. Under the Deficit Reduction Act of 2005, a refundable ccrc entry fee may be counted as a resource when you apply for Medicaid. That rule applies if the fee can be used for care, is refundable at death or departure, and does not grant ownership. Also, not every CCRC accepts Medicaid in its nursing wing. Ask directly what happens if you outlive your savings. Some nonprofits run benevolent funds for that situation, but others may require you to leave.
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Finally, review your Medicare coverage alongside the contract. If you have a Medicare Advantage plan from Humana, UnitedHealthcare, Aetna, or Blue Cross, check whether the CCRC’s skilled nursing unit is in network. Out-of-network rehab can cost far more. Medigap plans from insurers like Mutual of Omaha or Cigna do not use networks. Still, they only pay after Medicare approves a covered skilled nursing stay. Your State Health Insurance Assistance Program (SHIP) offers free, unbiased counseling. A SHIP counselor can help you compare how each plan works with the community you choose. An elder law attorney can review the contract itself.
Visit more than once before deciding. Eat a meal in the dining room. Talk to current residents about fee increases and care quality. Ask how many residents moved from independent living into the care center last year. Typically, the answers reveal more than the marketing brochure does.
Frequently Asked Questions
Does Medicare pay any part of a ccrc entry fee?
No. Medicare does not pay entry fees, monthly fees, or housing costs at any retirement community. However, Part A may cover up to 100 days of skilled nursing care in a Medicare-certified unit after a qualifying three-day hospital stay.
Is a ccrc entry fee refundable?
It depends on the contract. Some fees decline to zero over a few years. Others refund 50% to 90%, though usually at a higher upfront cost and often only after the unit is resold.
Can I use long-term care insurance at a CCRC?
In many cases, yes. Long-term care insurance can help pay for assisted living or nursing care under a fee-for-service contract. Some communities also offer a lower entry fee to residents who already hold a qualifying policy.
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Official Sources & Resources
For verified information on Medicare regulations and consumer protection:
- Medicare.gov (Official Site): medicare.gov
- CMS (Centers for Medicare & Medicaid Services): cms.gov
- NAIC (National Association of Insurance Commissioners): naic.org
- KFF Medicare Research: kff.org/medicare
- Social Security Administration: ssa.gov
Content last reviewed November 2026. If you notice any outdated information, please contact us.