As you research your senior living options, you’ll come across terms referring to the types of community contracts that are available. CCRCs (continuing care retirement communities) typically offer one or more types of contracts for providing residential services and medical care. Here are definitions of common terms that will help you understand these contracts — and differences between Type A, B, and C CCRC contracts — so you can decide which option is the best fit for you.
What is a CCRC?
Let’s start with a definition of a CCRC. Also known as a Life Plan Community, a CCRC is a senior living community that offers a “plan for life.” By choosing a CCRC, you’ll be entitled to a place to live for the rest of your life, and to services and amenities that support you to live independently. You’ll also be assured of a continuum of health care services that will match your needs as you age. A great benefit of a CCRC is that couples can start out living independently in the community, and if either ever needs long-term care, they won’t have to move elsewhere. They’ll get care in a place they know, from people they trust, and can stay together.
What is Life Care?
Life Care is a specific name for the Type A contract we’ll explain below. When considering differences between Type A, B, and C CCRC contracts, it’s good to know that Type A is considered the gold standard that communities offer, as it combines independent living with lifetime access to high-quality health care services. It keeps monthly expenses predictable and protects you from the constantly rising cost of health care. Not every CCRC offers Life Care. Those that do, such as Claridge Court, are referred to as a Life Care community.
What is a Continuum of Care?
It’s what makes a CCRC different from other kinds of retirement communities. It’s a collective term for additional levels of care, which will vary from community to community. It may include some or all of the following: assisted living, memory care, skilled nursing care, rehabilitation, respite care, in-home care, and hospice care. The main difference between Type A, B, and C CCRC contracts is how these care services are bundled, where they are provided, and how much they will cost.
What is a CCRC contract?
All CCRCs require an application and a signed contract. It will include a list of residential and community services and amenities you’re entitled to, as well as outline your financial and nonfinancial obligations.
What Kinds of Contracts do CCRCs Offer?
CCRCs will offer an entrance fee, equity or rental contract. You’ll find combinations or variations of these at every community you visit. By far the most common are entrance fee contracts. They require residents to join the community with an upfront deposit, and pay an ongoing monthly fee for services and amenities thereafter.
What are the Different Entrance Fee Contracts?
Life Plan Communities offer three types of entrance fee financial contracts. Here are the differences between Type A, B, and C CCRC contracts:
Also known as the Extended or Life Care contract, this contract provides unlimited access to additional levels of care provided by qualified health services professionals. Everything is provided on the community’s campus. Residents pay an entrance fee and then a fixed monthly fee that helps with predictability in financial planning and budgeting. There are minimal additional charges for needed health services, and those fees are significantly discounted compared to market rates. While this contract calls for the highest entrance fee of all three contracts, the trade-off is that the monthly fee is kept relatively stable. Almost all residential services, amenities, and a continuum of care will be provided at little or no increase in the monthly fee, even if your health care needs change in the future.
Also known as the Modified Plan, this contract also requires an entrance fee. However, the monthly fee is usually lower than a Type A contract as it only provides for a set menu of health services for a predefined time. Often the resident will be entitled to a certain number of days in the health care center at no cost or at a discounted rate, and then will be billed for additional days and services at full market rate, or at an ongoing rate with a small discount. Health care services may be delivered at other locations off the community campus. Couples who require different types of care may be separated and end up paying two monthly fees, one for each of the communities where they reside.
Also known as a Fee-for-Service plan, this contract requires the lowest entrance fee and possibly the lowest monthly fee of all three contracts. Some or all of the same residential services and amenities may be provided, but if additional levels of care are needed, they are chargeable at fee-for-service full market rates. Care services are usually located off campus, so in order to maintain their residence while receiving care, a resident will have to pay for short-term housing/care costs on top of their monthly fee.
What is the Best Contract to Choose?
There’s no easy way to know if you’ll need long-term care in the future. How much you may need and for how long depends on your family and personal medical history, life expectancy and health. However, statistics show that 7 out of 10 seniors ages 65+ will need long-term care at some point in their lives. In other words, if you turned 65 this year, you have an almost 70% chance of needing long-term care service or support in the years to come. Would you be comfortable with a certain level of risk, and do you have the financial resources to absorb the expenses of a Type C contract? Or do you prefer to have a predictability built in from the very start with a Life Care plan?
We hope this overview has given you some idea of the differences between Type A, B, and C CCRC contracts. We’d be happy to give you more information about how our Life Care contracts work at Claridge Court and answer your questions about our Life Plan Community. Reach out to us today by filling out the form at the bottom of this page.