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The Six Types of CCRC Contracts

CCRCs, or Continuing Care Retirement Communities are senior living communities that provide housing, personal and social services, and health care for life.

If your parents are planning to move to a CCRC, there are several things they need to consider, including the different types of CCRC contracts available to them. Each contract outlines the financial obligations of the residents and the various residential and community services or amenities offered by the facility. There are six types of CCRC contracts:

1.   Type A or Lifecare Contracts

This contract type covers senior housing options, residential services, other amenities, and access to health care across the full continuum of care from Independent Living to Assisted Living, to Memory Care, to Skilled Nursing (Nursing Home) are without a substantial spike in monthly service payments each year. Any fee increase would reflect the annual inflationary adjustments and augmenting meal plans if resident chooses to increase the number of chef-prepared meals they want to receive.

Though this is the most comprehensive contract type, it comes with the highest entrance and monthly service fees. Potential residents need to be both financially and medically qualified for these contracts.  Since the communities bear the burden of covering higher cost memory or skilled care, they require that new residents enter the contract without any pre-existing conditions that would indicate a need for that level of care in the immediate term.

2.   Type B or Modified Lifecare

Unlike Type A, the entry fee and monthly service fee will only cover the cost for a specified amount of care needed in the future. This means your loved one will only have access to a limited number of free days of health care. Additional days will be billed at full market rates or an ongoing, minimally discounted rate. Also, if you are getting this type of contract for both of your parents, if they each require different levels of care, you may have to make two separate monthly service payments.

Some Type B contracts offer a mix of allotted free days and discounted rates. Moreover, the number of free days per year might differ from facility to facility. The free days are not completely free since you still pay the monthly service fee, merely are called such because the care services are offered at no extra cost during these days.

Since resident incurs more financial risk, Type B contracts have lower entry and monthly service fees for independent living.

3.   Type C or Fee-for-Service

This contract type allows for a lower entry fee than other contracts. It generally covers some or all independent living services included in Type A and B contracts. However, if your loved ones require higher levels of care, such as assisted living, skilled nursing, memory care, or long-term care, your monthly fee will increase to cover the costs.

4.   Rental Contracts

You don’t need to pay a minimal entry fee with rental contracts. However, this contract works on a month-to-month basis and will cover various independent living services and amenities based on your monthly fee. You also must take full responsibility for the cost of future healthcare needs and pay the full market rate to access healthcare facilities.

5.   Equity Contracts

An Equity contract is a less common option in which the resident owns the home, meaning the resident’s heir can inherit the property. Though you don’t have to pay an entry fee, you still need to pay a monthly service fee for home maintenance and other services and amenities.

Some CCRCs rely on the co-op model, where residents only purchase shares of the corporation. In others, the ownership transfers to the facility operator if the resident moves out of the community or passes away. Irrespective of the type of Equity contract, you need to pay the full market rate for any healthcare services needed.

6.   CCRC Without Walls

This is similar to a Type A contract in that your loved ones will receive full access to a wide range of services and amenities, including long-term care in their own homes. The fees are much lower than your regular Type A contract, and if your loved ones choose to become a resident of the CCRC later on, they will be given priority over other applicants.

To learn more about CCRC contract types, contact Oasis Senior Advisors at 475.619.4123 or 914.356.1901, or fill out this online form.

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Paul and Susan Doyle

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