As you research your senior living options, you’ll discover that not all Continuing Care Retirement Communities (CCRCs) are alike. Particularly when it comes to paying for senior living health services. To help you understand how various CCRC contracts are structured, we’ve provided a financial planning primer.
The first thing to know is that CCRCs, also known as Life Plan Communities, typically require a one-time, partially refundable entrance fee and a monthly service fee. Here are the primary types of contracts you’re likely to encounter:
Type A, aka LifeCare®
This type of contract promises to care for residents for the rest of their lives without significantly increasing their one-time entrance fee and monthly fees. If the need arises for 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
All things being equal, this type of contract requires a lower monthly fee than Type A, and possibly a lower entrance fee. However, if you move to a higher level of care, such as assisted living or skilled nursing, you’ll be responsible for some of the cost. Typically, this type of contract provides either 1) a limited number of free days of health services with additional care at per diem market rates, or 2) an ongoing minimally discounted rate for health services.
Type C, Fee-for-Service
All things being equal, a fee-for-service contract typically requires the lowest monthly fees and possibly the lowest entrance fees compared to Types A and B. However, if higher levels of care, such as assisted living or skilled nursing, are required, your monthly fee will increase to reflect the market rate.
Rental contracts require no entrance fee or perhaps a nominal community fee. However, the monthly service fee may be higher than you’d pay in a comparable entrance fee community. If at some point you require a higher level of care, such as assisted living or skilled nursing, you’ll pay the full market rate.
At StoneRidge, we offer several types of contract options, including:
- Type B contract with either 50% or 65% refundable entrance fees
- A nonrefundable entrance fee contract
- A rental contract
Our residency counselors can help you compare the cost of staying in your home versus moving to StoneRidge and show you how our contract options can help preserve your assets and provide peace of mind.
What is an entrance fee?
Also known as a buy-in, an entrance fee is a one-time, upfront fee you pay to move into the independent living part of a Life Plan Community. The amount of your entrance fee depends on the size of the residence you choose and the number of people living in the residence. A portion of your entrance fee may be refundable to you or your estate.
Tax-deductible: Part of your entrance fee, and some of your monthly service fee, may qualify as a tax deduction. Consult your tax advisor for guidance.
What is a monthly fee?
Monthly fees are paid every month to cover the community’s services and amenities. The amount you pay depends on the size of your residence, the number of people living there, and the range of services and amenities available to you, such as maintenance, housekeeping, utilities, scheduled transportation, dining plan, gym membership, security and scheduled activities. Learn more about the services and amenities at StoneRidge.