When it comes to Continuing Care Retirement Community (CCRC) contracts, knowing the differences between the most common types of contracts is key to making an informed decision. It can be challenging, however, because each type carries variations of cost and services that can make a big difference in the future. In this article, we’ll explore the distinctions between Type A, B, and C contracts and help you see how Type B CCRC contracts, specifically, can be a good balance between cost and services. Let’s get started.
The ABCs of CCRC contracts
Generally speaking, CCRCs, sometimes called Life Plan Communities, offer contracts that require an upfront entrance fee and predictable monthly fees. Independent Living residents enjoy all the residential services and amenities offered by the community, and have access to on-site long-term health care services when needed. The major differences between CCRCs, however, lie in the contracts they offer.
Type A: Life Care
Type A contracts provide the most comprehensive care available. With this contract, your one-time entrance fee (usually partially refundable) and monthly fees provide complete access to a variety of housing options, premium amenities and services, plus a full continuum of on-site long-term health care. Residents are promised a home for life at the community, even if they move to another residence on campus as their care needs change.
Type B: Modified CCRC
With a Type B contract, your entrance fee and monthly fees will likely be lower than with a Type A contract, but a Type B contract also has limitations on covered long-term care services. In signing a Type B contract, you’ll pay a higher rate for long-term care when and if you need it, and your monthly fee will rise while you’re receiving care. Long-term care will typically be provided as either a limited number of free days included as part of the entrance fee, with additional care billed at per diem market rates, or as an ongoing, minimally discounted rate. Health care services may be delivered on-site or off-site, and two monthly fees may be incurred if couples require different levels of care.
Type C: Fee-for-service
Type C contracts have the lowest entrance and monthly fees of all contract types. If you have a Type C contract, and at some point require care on a short-term basis, you may be required to pay two monthly fees. To maintain your independent living residence, you would have to pay the monthly fee on that residence, plus the costs of housing and health care received in a separate residence offering the higher level of care you need (assisted living, skilled nursing, memory care). While you do pay less as an independent living resident, the market costs of care can rapidly exceed the amount of an upfront entrance fee without the benefits of prearranged long-term care costs.
Which is right for you?
Costs aside, it’s clear that a Type A CCRC contract is the most comprehensive choice when it comes to planning for any future health care services. There is great peace of mind in knowing your needs will always be taken care of with minimal cost increases. And while the lower costs of a Type C contract are attractive, most of us would like to have our medical care accounted for should the need arise.
That’s where Type B contracts come in. Modified CCRC contracts allow you to pay lower entrance and monthly fees, while still making provisions for future long-term health care. The biggest question comes down to your anticipated needs. Will you require assisted living or skilled nursing care at some point? If so, how much will you need and for how long? Does your family history show a need for care? How much risk are you prepared for and do you have the financial resources to absorb it? While no one can tell the future, considering these questions can help you make a better decision and set you up for success when choosing the right CCRC.
Here for you
If you’ve been considering a move to a senior living community, Grand Lodge at the Preserve is a Type B CCRC with the amenities and health care services you’ve been looking for. Get more information by filling out the brief contact form below. A sales counselor will be in touch soon to discuss your plans and help you navigate this important decision.