Retirement Communities Feel the Effects of the Economic Downturn
Financial problems have been mounting at a number of assisted-living and continuing-care communities, forcing some facilities into bankruptcies and inflicting new worries on residents and their families who thought their life plans were comfortably set.
In recent weeks, Erickson Retirement Communities, which manages 19 continuing-care retirement communities in 11 states, declared bankruptcy. Sunrise Senior Living Inc. posted a quarterly loss of $82 million and announced plans to sell off 21 of its assisted-living communities. Nationally, small retirement communities are raising prices, changing the way they operate, selling themselves off to bigger chains, or getting out of the business altogether. Many companies say they can’t make a profit—or even succeed on a nonprofit basis—in an environment that combines the high cost of caring for elderly residents, restrictive Medicaid budgets, tight credit markets and few residents willing and able to pay top dollar for their care.
When a facility fails, it can have myriad effects on its residents. The good news is that no one gets kicked to the curb—at least not right away, however, fees can skyrocket, making the facility unaffordable, at which point facilities can kick residents out for nonpayment.