This is an excellent question!
Independent investigations into CCRC’s by the GAO and other agencies have determined that most CCRC’s in the industry are financially stable and the risk of failure is minimal. Most of this has to do with how CCRC’s are regulated. In most states there is some type of oversight on the state level. California for example has some of the most stringent and thorough regulatory oversight on CCRC’s.
If you want to get more information about the financial stability of a CCRC, then here are some tips to help you.
1. Ask for their financial information such as IRS Form 990 or yearly financial statements. Look at available cash on hand and debt to assets ratios. If the CCRC has significantly more debt than assets/cash on hand, then it might be a sign of financial trouble. Less cash on hand means that the community will have less money to pay bills, etc.. should something happen. A healthy reserve of cash is important.
2. Ask around. Ask people in the area at other health care offices, retirement centers, or financial professionals thoughts on local CCRC’s. You are bound to find someone with some experience here.
3. Look at occupancy rates. Some communities have seen lower occupancy rates in recent years because of the recession. However, most financial sound and quality communities should have a healthy occupancy level at most times of the year.