At least 16 facilities have gone bankrupt since the pandemic, survey finds
July 7, 2025
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Bankruptcy filings among continuing-care retirement communities have surged since the pandemic, eroding residents promised refunds.
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Seniors have lost significant portions of hefty entrance fees meant to secure lifelong care.
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Industry experts warn weak regulation and ties to the housing market leave retirees financially vulnerable.
When 89-year-old Arlene Kohen moved into Harborside, a continuing-care retirement community in Port Washington, N.Y., she believed she had secured peace of mind. The community offered independent living along with the promise of nursing, memory, and assisted care should her health decline. Like many seniors, she paid a steep price for that security: a $945,000 entrance fee and $5,700 in monthly charges by the end of her stay.
But that promise unraveled as Harborside went bankrupt multiple times. Ultimately, Kohen, who sold her family home to afford the entrance fee, was forced to leave when the new owner scaled back services. Her family now expects to recover less than a third of the $710,000 refund they were promised a scenario increasingly common across the nations retirement communities.
According to a Wall Street Journal report, at least 16 continuing-care retirement communities have filed for Chapter 11 since the onset of the Covid-19 pandemic, wiping out more than $190 million in residents savings from over 1,000 families. Harborside alone affected 212 families.
These communities, which often rely on residents home sales to fund hefty entrance fees, became financially strained when the pandemic halted new move-ins and roiled the housing market.
Religious roots,modern complexities
The business model of these facilities which blend housing, healthcare, and insurance-like future services has roots in religious organizations dating back a century. Though most are nonprofits, many depend on upfront entrance fees not only for future services but to pay off construction debt and fund daily operations.
When cash flow dries up, residents, as unsecured creditors, often come last in bankruptcy proceedings, behind bondholders and other secured lenders.
Regulation remains spotty despite past warnings. Following the 2008-09 financial crisis, the U.S. Senate Special Committee on Aging flagged these communities as especially vulnerable during economic downturns. Yet many states lack the expertise to regulate facilities whose financial models resemble complex insurance products.
Even Florida, one of the few states treating such facilities as insurance entities, failed to prevent losses for about 100 seniors when Unisen Senior Living in Tampa collapsed last year.
Industry insiders say the underlying issue is structural. You need expertise thats equivalent to insurance commissioners expertise if youre going to regulate that, said Katherine Pearson, a law professor at Pennsylvania State Universitys Dickinson Law, speaking to the Journal. But few states have such expertise.
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