What is Life Care and What is a Life Care Contract?May 1, 2020
If you’re searching for the best senior living options, you may have some questions about what exactly a CCRC (continuing care retirement community) is. Or a Life Care community. Are they the same thing?
While they have many similarities, they’re not the same. All Life Care communities are CCRCs, but not all CCRCs are Life Care communities.
What’s a CCRC?
Let’s start with CCRCs — which are also sometimes called Life Plan Communities. Residents typically enter CCRCs as independent living residents, knowing they have access to on-site health care — including assisted living, rehabilitation and skilled nursing care — should the need for such services arise. This continuum of care offers a secure pathway for aging adults and their future health care needs.
A CCRC eliminates the need for a disruptive move if residents ever need a higher level of care. This is quite a benefit when you consider that such a move is likely to be made during a time of physical or emotional stress.
Additionally, spouses can live on the same campus and receive different levels of care just steps away from each other. The community ensures that if one spouse requires health care services, the other won’t need to move closer to a health care resource or endure frequent long-distance trips for care. This convenience greatly simplifies care and avoids uprooting spouses from their social networks at a time when they need them most.
A CCRC/Life Plan Community may offer only one or multiple contract options, primarily referring to themselves as a Type A, Type B or Type C community.
Life Care: Type A Contract
With a Life Care contract, you pay an entrance fee and a monthly fee. Even though the entrance fee may seem high at first, you’re likely to save significantly in the long run. That’s because the rate is predetermined, and substantially discounted below market rates for care, so if you ever do need assisted living or a higher level of care, your monthly fee will increase very little, if at all, over what you’re paying as an independent living resident.
Modified Plan: Type B Contract
With this plan, 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 a Type B community, long-term health care is typically 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.
Fee-for-Service: Type C Contract
Nearly half of all continuing care retirement communities offer a fee-for-service contract, or a Type C contract. As with Type B communities, housing along with services and amenities are provided; however, access to long-term care, while typically guaranteed, is charged at market rates.
If you have a Type C contract, and at some point need 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.
So which CCRC/Life Plan Community contract is the best? There’s no one right answer for everyone. By learning about the different types of financial contracts and considering your unique situation, you can make an educated decision about what’s best for you.