"Raking the lawn and cleaning the gutters just got to be too much," says William Mason, a retired District of Columbia government supervisor.

"We didn't want to be a burden to anyone, but we wanted to live someplace where we could get care for the rest of our lives."

So the 74-year-old Mason and his 79-year-old wife Faith sold their Rockville house and paid an entrance fee of $76,000 and now pay monthly fees of $1,655 to live in Goodwin House in Alexandria.

They joined an estimated 200,000 elderly Americans living in continuing care communities, where those over age 65 contract to pay entrance fees ranging from $20,000 to $120,000 and monthly service fees of $600 to $1,200 per individual, in return for a place to live and for nursing care for the duration of their lives.

For their money, the Masons can have three meals a day in communal dining, housekeeping, some health services, apartment maintenance and repairs and a program of activities and trips with the 300 others living in the same high rise. If the Masons can no longer function independently, they can move into the Goodwin House health-care center, where, for basically no extra cost, they can receive nursing care.

"When you get to be our age, you have the feeling that something could happen at any time. Here we know we can be taken care of immediately," says Mason, who found out how quick that help could be several months ago when he suffered chest pains. A nurse arrived within seconds after he pushed a call button in his apartment. "If I'd been in a regular apartment building, I would have waited a long time for that help."

Continuing care can have many advantages for the elderly, says Robert M. Ball, the former commissioner of Social Security who was chairman of an advisory committee to the Robert Wood Johnson Foundation, which funded a Wharton School study of continuing care.

"In addition to having immediately available a variety of health and social services, which they can call on according to their desires and needs," says Ball, "the residents have a virtual guarantee that they will be adequately taken care of no matter what happens to their health. The fear of some day being a burden on relatives and friends, or finding oneself helpless among uncaring strangers, is effectively removed."

It is this health-care guarantee that distinguishes continuing or life-care facilities from other retirement communities.

"They provide insurance against the cost of long-term care," says Ball, "and they supplement the coverage of acute health care costs paid for largely by Medicare and private insurance. The unique feature is that this otherwise unobtainable full insurance is provided in combination with independent living arrangements, which the resident can enjoy as long as health permits."

Continuing care is targeted to the middle-class retiree, who typically are in their 70s and in relatively good health when they move in. Many use equity from the sale of their homes to pay the hefty entrance fee.

Depending on the contract, if the resident moves out, he may get back some of his entrance fee, prorated for the length of time he was in the facility. At Goodwin House, it is refundable up to four years at a reduction of two percent a month.

In some cases, the fee is returned to the estate if the resident dies within a certain length of time after moving in. Goodwin House refunds the fee only if the resident dies within 30 days of entrance.

Continuing care works by distributing health-care costs among the residents, says Lloyd Lewis, chairman of the continuing care committee of the American Association of Homes for the Aging, and executive director of Kendal-Crosslands, a continuing care community in Kennett Square, Pa.

"By spreading the costs among all, you are able to purchase high quality and good care, which many of the residents would not be able to afford individually.

"The beauty of a continuing care retirement community is that those who are moving from one level to another, such as from apartment to intermediate to long-term care within the same facility, are not separated from their spouses and friends."

That's been the main benefit to 89-year-old Russell Worden and his 90-year-old wife, Eva, since they moved from Orlando into the Hermitage, a continuing care community in Alexandria. Eva Worden had been in and out of nursing homes in Orlando, and her husband was finding it increasingly difficult to see her or to get help for her at home.

"I had to quit driving," he says, "and it was hard to get around at my age."

Now Russell Worden lives in a one-bedroom apartment in the Hermitage, and his wife is in the nursing home.

"I see her two or three times a day," says the retired oil driller, "and take her back and forth to the dining hall and the apartment."

While continuing or life-care communities can have many advantages for the elderly seeking new living arrangements, they also have had their share of problems.

When he opened hearings on continuing care, Sen. John Heinz (R-Pa.), chairman of the Senate Special Committee on Aging, charged that it too often had been "thwarted by inept management, mismanagement and outright fraud. As a result, in recent years scores of life-care facilities have been forced to declare bankruptcy."

Among the problems Heinz cited: "Residents of life-care communities are given no equity interest in the facility. When bankruptcy occurs, the senior-citizen residents have no standing and lose all of whatever they have paid into the home. Many life-care communities are financed as real-estate ventures with endowment fees being used to cover initial construction costs. Reserves are either not established, or they are set too low to cover future needs.

"Some life-care communities are not actuarially sound and projections of future revenues and costs are incorrect. Some homes use a 'cash' accounting system rather than an 'accrual' system, thereby grossly inflating their cash position and misrepresenting their solvency."

The biggest collapse of continuing care facilities occurred in 1979 when Pacific Homes, a California based nonprofit corporation that had 2,000 elderly residents in 14 communities, went bankrupt. The fraud, said trustees in their report, "consisted of taking money in exchange for the promise to provide lifetime care, but then diverting the money for the payment of current obligations instead of reserving those funds for the future costs of that care."

In the Washington area, the 183-unit Washington House in Alexandria and the 200-unit Virginian in Fairfax, both managed by the Temple Foundation, are examples of local life-care communities which have had trouble. Last February, the Temple Foundation filed for reorganization under the U.S. Bankruptcy Code.

Court documents filed by the Foundation's lawyers show that its revenues were insufficient to cover the cost of maintaining two retirement homes, particularly to support health-care centers in both buildings. Sources have attributed the problems to the high inflation of the 1970s, the fact that some of the original residents had contracts locking the foundation into low monthly room rates, and the unexpected longevity of some residents.

Last month, however, the U.S. Bankruptcy Court in Alexandria dropped the case when most of the residents in the two facilities agreed to an increase in rates and the Foundation paid off its creditors.

But despite the problems, there is a big demand for continuing care, with communities such as Goodwin House reporting waiting lists of 350 or more, or nearly a four-year wait.

By the year 2000, the number of continuing care communities is expected to increase dramatically from the current 400. One reason is the expected population increase of those over age 65 from 28 million today to 35 million by the turn of the century.

"The potential for new continuing care residents is in the millions," says Ball. "Homeownership is widespread among the elderly. And the money they can get from the sale of their homes usually more than can pay an entry fee."

Many of the new continuing care communities will be developed by for-profit companies, rather than the nonprofit groups which have dominated more than 90 percent of the field. A major reason will be the greater ease of raising capital.

For-profit participation will dramatically change the concept of continuing care, according to Aaron M. Rose, national director, retirement centers for Laventhol & Horwath, a Philadelphia-based international accounting and consulting firm.

"In the future, proprietary companies will offer a contract that provides housing, social activities and food for the resident, but health care will be on more of a fee-for-service basis. The nonrefundable entrance fee will be replaced by a pure rental or an entry fee that is totally or almost refundable. This will be ameliorated by the fact that large insurance companies will come on the market with projects to insure long-term health care."

Already several for-profit groups, mainly in the service or nursing care industries, have announced their intentions to enter the field with such arrangements. Over the next four years, the Marriott Corp. plans to build nationally two to three life-care communities, with the first expected to be in the D.C. area.

In the Marriott communities -- each of which will accommodate 300 to 400 residents -- part of the $70,000 to $100,000 entry fee will purchase a "medigap" insurance policy to provide full coverage for longer term custodial care, according to Terry Souers, Marriott's director of corporate relations. A "substantial" amount of the entrance fee will be paid back at the departure or death of a resident.

"There's a real potential out there for much more continuing care," says Ball. "And in the future, I predict we'll be seeing a great deal more."