When considering senior living communities, the variety of contract types can seem overwhelming. Yet understanding these financial options is key to making an informed decision. In this post, we’ll explain the differences among contracts for Life Plan Communities.
Life Plan Communities in a nutshell.
A Life Plan Community (sometimes called a Continuing Care Retirement Community, or CCRC) provides residential living for independent seniors, plus access to long-term care. Because of the investment the community makes in residents’ robust lifestyle opportunities and future care needs, Life Plan Community residents pay a one-time entrance fee plus a monthly service fee. Still, there are differences about what’s included with each contract.
Understanding the Different Contract Types
Life Plan Communities typically offer one or more of three types of contracts:
Type A (Life Care): This is the most comprehensive contract available. For the resident, it ensures a home at the community, daily opportunity for fun and fulfillment, and perhaps most importantly, lifelong access to long-term care, including some or all of the following: assisted living, memory care, skilled nursing and rehabilitation – at little to no additional cost.
The entrance fee and monthly fees with a Type A contract may be higher than other contract types, but in exchange, residents gain peace of mind knowing their healthcare needs will be covered for life – at the community – without a significant increase in costs. This type of contract is ideal for those who want predictability in their future healthcare expenses and protection against the ever-rising costs of long-term care.
Type B (Modified Care): With a Type B contract, the entrance fee and monthly fees are typically lower than those of Type A. However, residents receive a limited amount of care at no extra charge, often a predetermined number of days or services. Once this limit is exceeded, additional care is provided at either a discounted rate or at full market rates, depending on the contract. This option may suit those who are willing to assume more financial risk for the costs of future care but still want some level of protection.
Type C (Fee-for-Service): The entrance fee for a Type C contract is usually the lowest among Life Plan Community contracts, and monthly fees are often lower as well. However, if care is needed, the resident pays the full market rate for whatever care they may need, such as assisted living, memory care or skilled nursing. Essentially, the entrance fee in a Type C contract pays only for access to a community’s health center, so residents know where they’ll receive care if they need it. This option might appeal to individuals willing to assume the financial risk of paying full market rates for care for as long as it’s needed.
The Advantages of a Type A Contract
At first glance, the entrance fee and monthly fees associated with a Type A contract might seem expensive. However, once you understand everything that’s included, the value becomes clear.
The monthly fee covers a wide range of services and amenities that contribute to an active and fulfilling lifestyle:
Dining services: Most communities with a Type A contract include a dining program with multiple dining options, allowing you to enjoy chef-prepared meals prepared, served and cleaned up, by a professional dining team.
Fitness and wellness programs: Access to a fully equipped gym, fitness classes, and wellness programs are often included. Whether you enjoy swimming, yoga or personal training sessions, it’s all part of the package with organized fitness activities available every day.
Home maintenance: Say goodbye to the hassles and unexpected costs of home repairs, lawn care, and housekeeping. These services are included in the monthly fee, allowing you to enjoy a worry-free lifestyle.
Educational and recreational activities: Communities often offer a variety of lifelong learning classes, workshops and on-site entertainment. Whether you’re interested in woodworking, painting, or continuing education, you’re sure to find fun and intellectual stimulation.
Social and cultural events: Many communities host regular parties and social gatherings, cultural presentations and performances, as well as off-site outings. These opportunities to connect with others and explore new interests are all built into the lifestyle.
You may be surprised at the value.
One of the greatest benefits of a Type A contract is the assurance that, should your health needs change, you care is available at an always-predictable cost. For instance, at Reata Glen, every resident has priority access to the adjacent health center for assisted living, memory care and long-term care in a skilled nursing center, if ever needed.
Moreover, a portion of the entrance fee for a Type A contract is tax-deductible as a prepaid medical expense*, which can help offset the initial cost. The tax benefits, combined with the extensive services and amenities included in your monthly fee, make a Type A contract a smart investment for those looking for an engaged and worry-free future.
Get all the details in one place.
To learn more about the tremendous advantages of Reata Glen’s Type A contract, contact us today. We’ll be happy to answer all your questions and send you our free Type A contract guide.
*Consult a professional tax advisor for details.
