The Benefits of Life Care Contracts

You may have heard the terms “CCRC” or “continuing care retirement community” or “Life Plan Community.” They all refer to a type of senior living community where older adults can age in place. Typically, you join the community as an independent living resident and live in an apartment home, cottage, townhome or duplex. Maintenance and housekeeping are included, a certain number of meals are provided, and a wide variety of classes, programs and activities are offered. At Croasdaile Village, for example, you’ll find everything from aquarobics and bridge club to line dancing and woodworking.

In addition, a Life Plan Community offers progressive levels of care on-site. The continuum varies from one community to the next, but generally care levels include assisted living, memory care, skilled nursing and rehabilitation.

Residents find it reassuring that care is available should the need arise. Additionally, spouses can live on the same campus and receive different levels of care steps away from each other. In either case, residents find comfort in the fact that, whatever happens, they’ll be among friends in familiar surroundings. Plus, their children don’t have to worry about them. They know their parents are safe, secure and well taken care of.

Financial components of a Life Plan Community

• The Entrance Fee (sometimes called an Admission Payment). An upfront, one-time fee that can range anywhere from $60,000 to $500,000. Many people use the equity in their home to fund the entrance fee. A portion of the entrance fee may be refundable.

• The Monthly Service Fee. A monthly service fee covers the services and amenities associated with living at the community. The amount you pay depends on the size of your residence, how many people live there, and the range of services and amenities available to you. When comparing the monthly costs of living at home to those at a Life Plan Community, many people find they spend less at a community like Croasdaile.

Understanding Contracts

How you pay for health services depends on the type of contract you sign. There are three main types of Life Care contracts or residency agreements offered by Life Plan Communities: Type A, Type B and Type C.

Type A, Life Care: This type of contract promises to care for residents for the rest of their lives without significantly increasing their monthly fees. If the need arises for a higher level of care, the resident may transfer to the appropriate level of care at a predetermined, substantially discounted monthly rate for as long as care is needed.

Type B, Modified Plan: This type of contract offers priority access to higher levels of living at: 1) a minimally discounted rate, or 2) for a limited number of free days, with additional care at per diem market rates.