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Residents at Florida continuing care retirement communities deserve every protection from fraud, but a bill filed last week by Sen. Tom Lee is not the way to provide that protection, according to LeadingAge Florida, the association that represents retirement communities.
“Although the bill is well-intentioned, it simply needs much more work,” said Steve Bahmer, LeadingAge Florida President and CEO. “It is regulatory overreach that will drive up costs for seniors, inhibit investment in expansion and construction of new communities in Florida, and unnecessarily disrupt a field that has been financially strong for decades.”
SB1430 was developed by the Office of Insurance Regulation (OIR) in response to the questionable behavior and poor management that drove a Tampa retirement community into bankruptcy. Sen. Lee said in the announcement of the bill last week that the management of one retirement community in his district highlighted the need for increased oversight.
Currently, 71 continuing care retirement communities (CCRCs) serve more than 30,000 Florida seniors. In the past 30 years, only three Florida CCRCs have had serious financial challenges, one of which opened during the great recession, and the other, according to the OIR, blatantly disregarded current regulatory requirements.
“SB1430 is a 100-page bill that imposes massive new regulations on all 71 CCRCs in an effort to correct a problem with a single community that was taken over and managed by a known bad actor, who ignored existing Florida laws,” Bahmer said.
What’s more, Bahmer said, the bill – which was developed without input from the providers or the residents themselves – will drive up costs for the very residents the bill aims to protect.
“There is no dispute on this point,” Bahmer said. “The OIR itself has testified that its analysis shows a 2% increase in resident fees from one provision of the bill, to say nothing of other provisions that will increase costs to residents.”
One LeadingAge Florida member’s analysis indicates that its residents would be hit with an average assessment of about $113,000 per resident if the bill were to pass in its current form.
Joel Anderson, CEO of Village on the Isle in Venice and Chairman of the Governor’s Continuing Care Advisory Council, said the gravity of a bill that modifies more than 50% of the sections in the current law has been ignored.
“If this bill passes, it is certain that it will produce unintended consequences, destabilize good performing CCRCs, and impose higher costs on current and future residents of CCRC communities,” Anderson said. “The Governor’s Council and other industry experts have provided significant feedback and input to the OIR and the Insurance Commissioner regarding this bill. However, the leadership has blatantly ignored the major areas of concern, and they refuse to slow down and allow an effective dialogue to take place with all stakeholders.”
One of the more grave effects is that the provisions of the bill will drive capital away from this important sector of Florida’s economy. Due to new restrictions and requirements, providers and lenders that might be able to help when communities do have challenges will no longer be willing to.
Bahmer said the uncertainty caused by SB1430 has played a major role in companies withdrawing from opportunities to purchase CCRCs, and has caused other companies to slow development projects and to pledge not to invest in any further development in Florida.
He said LeadingAge Florida and its members support thoughtful regulatory reform that protects Florida’s seniors and their investments in senior care. And they are committed to partnering with the Sen. Lee, the OIR, CCRC residents, and other stakeholders to identify and develop reforms that provide that protection without burdening residents and destabilizing the field.