CCRC vs. Assisted Living: How the Costs and Contracts Compare

The California Department of Social Services describes a continuing care retirement community as a place that offers a long-term continuing care contract providing housing, residential services and nursing care, usually in one location and usually for a resident's lifetime. The contract is between a person 60 or older and the provider, and it promises services for longer than one year.

The department says most of these communities have assisted living units and a skilled nursing facility on or near the grounds. A resident can move between those levels of care as needs change.

An ordinary assisted living community or board and care home is licensed in California as a residential care facility for the elderly (RCFE). The resident signs an admission agreement and pays a monthly rate. There is no promise of future nursing home care, and no large payment up front. Our guide to senior care levels in California sets the options side by side.

The department says most continuing care contracts call for an entrance fee and monthly service fees, and that providers, not the department, decide both amounts. We do not print entrance fee figures here because no public source we could verify reports them. Each provider's disclosure statement gives its own range.

Monthly fees can rise. The department says any change must be based on projected costs, the prior year's costs per resident and economic indicators set out in the Health and Safety Code. The provider must give 30 days' advance written notice and meet with residents to explain the reasons.

For the month-to-month side, the CareScout Cost of Care Survey reports a 2025 California median of $7,000 a month for a private one-bedroom unit in an assisted living community. California Advocates for Nursing Home Reform says the state does not limit private-pay rates in these homes, and that homes may not charge a security deposit.

The department warns that contract provisions vary extensively from provider to provider and community to community. The differences that matter most for money are these:

• Life care contracts. California's statutes define a life care contract as one that promises routine services at all levels of care for the rest of the resident's life, with a skilled nursing facility on or next to the premises. The monthly fee may not change based on level of care, and the contract must include provisions to subsidize a resident who becomes unable to pay.
• Other continuing care contracts. These promise care for more than a year but may charge more as the resident moves to assisted living or nursing care. The contract must spell out what happens to the monthly fee on a transfer.
• Refundable and amortized entrance fees. The department says a contract can provide for a refund of part of the entrance fee when the contract ends, or can say the fee is fully amortized over a set period, after which neither the resident nor the heirs get a refund.
• Repayable contracts. The statutes describe contracts that promise to repay all or part of the entrance fee only when the unit is resold or reoccupied. The law says that kind of promise may not be called a refund.
• Ownership arrangements. Some contracts give a membership, an ownership interest in the living unit, or a share in a master trust.

The Department of Social Services is responsible for oversight. A provider must hold a certificate of authority before it may enter into a continuing care contract, and it must also hold an RCFE license. A community that offers skilled nursing needs a skilled nursing facility license from the California Department of Public Health.

Two parts of the department's Community Care Licensing Division are involved. The Adult and Senior Care Program monitors care, buildings and services. The Continuing Care Contracts Bureau reviews applications to operate and monitors each provider's finances and its ability to keep its long-term promises.

The bureau also reviews each provider's contract form against Health and Safety Code section 1788. The department is direct about the limits of that review: approval means the contract meets the minimum requirements of the statute. It is not a promise that the provider will perform and not an endorsement of the contract's terms.

Health and Safety Code section 1788.2 lets either side cancel a continuing care contract without cause within 90 days from the date the resident first moves in. Under section 1788.4, in a community where residents do not buy an ownership interest, a resident who cancels in that period is refunded what was paid, less the amount used for the resident's care, and the provider must pay within 14 calendar days after the resident gives back the living unit.

After the 90 days, the contract's own terms control. The statutes require the contract to say that the provider may end it only for good and sufficient cause, with at least 90 days' written notice, and to state what refund, if any, applies.

By comparison, leaving an ordinary assisted living home is a matter of the notice and refund terms in the admission agreement, with far less money at stake. If funds run low in a month-to-month home there is no built-in subsidy. Our guide to what happens when the money runs out covers that situation.

Before a provider takes any payment or signs a contract, the statutes require it to hand over a disclosure statement in the form the department prescribes. It shows the kinds of contracts offered, the range of entrance fees and the share that may be refunded. A prospective resident also has the right to visit each level of care and to inspect the assisted living and nursing home licensing reports for at least the past two years.

The department's own list of questions for prospective residents includes these:

• What types of contracts are available, and what is included in the monthly fee?
• What happens to the monthly fee if I move to assisted living or nursing care?
• Does the contract clearly say whether any of the entrance fee is refunded, and when?
• How much can fees rise, and what happens if increases outrun my ability to pay?
• What reserves and long-term debt does the provider have?
• Are there tax considerations I should ask a professional about?

Hamssa Benrekia is a senior living placement specialist in Torrance who works with families in the South Bay and Harbor area of Los Angeles County. She does not sell or review continuing care contracts, and she does not give financial or legal advice. For families who decide on a month-to-month home, she can shortlist licensed assisted living communities and independent living options that may fit a budget. To talk about that, contact Hamssa. For monthly prices, see assisted living costs in California, or start from the California Assisted Living Placement Guide.