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Understanding CCRC Contracts When Choosing Your New Forever Home

Continuing Care Retirement Community

When life tells you or your loved one that it is time to change your housing situation, families may consider the option of a CCRC or Continuing Care Retirement Community. Life Plan Communities are the same idea with a different name, depending on the community.

For many seniors, this milestone moment can be emotionally charged, and the process may seem overwhelming, especially when understanding the various types of contracts available and what they entail. Let’s look at the different types of housing and contracts you may be confronted with and the elements that make up the contract.


First Steps in the Search for Your Ideal CCRC

The first step in the process is to determine your personal needs combined with services you’ll require, including medical care, and work out your budget. Follow up with your wish list of amenities. Your search should include facilities that will enable you to continue with the activities you currently enjoy. Most communities offer a host of options to appeal to various tastes. However, not all CCRCs are alike.


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What to Expect In a CCRC

Continuing Care Retirement Communities are structured as either high-rise condominium-style apartments or a combination of independent single and duplex units specifically designed to appeal to mature adults, incorporating architectural elements for comfort and manageability for those with physical limitations. In addition, most CCRCs offer amenities that include fitness gyms, swimming pools, libraries, social activities, and formal dining areas for daily meals. Onsite professionals are trained to work with the specific needs of seniors, including medication management and memory care.


Fee Types for Continuing Care Retirement Communities

Most CCRCs require a fee paid before entering, with subsequent monthly fees per tenant. Costs are determined by the type and size of housing chosen, the level of care required, and the services attached to your package. Each Continuing Care Retirement Community is individualistic in its services and amenities.


Entrance Fees

The entrance fee is a one-time charge paid upfront before moving into the senior community. It will vary in amount based on the contract options selected and include the following criteria:


  1. How modest or luxurious the property
  2. What amenities are included
  3. How the services are packaged
  4. What level of medical care is required
  5. The number of tenants moving into the unit
  6. Contract option selected

As an example, let’s look at Brooksby Village in Boston. For a one-bedroom, one-bath unit, your 90 percent refundable entrance fee starts from $210,000, with a regular monthly fee of $2,448. Notice the word ‘from,’ which indicates this as a base rate, depending on what additional service level you require.

Up to a certain percentage based on the CCRC, entrance fees are refundable to you or your estate upon departure. Since you don’t have ownership over your CCRC residence, many agreements indicate that refunds will not be issued until your residence has been reoccupied.


Monthly Service Fees

Each occupant within your domicile will pay a monthly fee to cover all services and amenities that the service package within your signed contract provides. The amount will depend on the services and amenities selected and the level of living you require, from independent living to skilled nursing or memory care assistance.


Types of CCRC Contracts

Much of the cost structure in contracts will depend on the level of health care you require when entering the community and the size and type of housing offered.

Life Care Contracts – Type A
Type A communities are designed to provide several levels of care, with residents given unlimited access to all levels of care at a reliable rate throughout their stay. Couples with differing care needs are each charged a monthly fee based on their individual care requirements. For example, a wife will pay a bit more per month than her husband if she requires added assistance with bathing and medications.

The life care contract can be adjusted as more services are required, and with the multiple levels of care available, you won’t need to move out based on changes in your health. An added benefit is that the costs within the community for care are usually much more reasonable than bringing in outside help.

Modified Care – Type B
With type B communities, you’ll still be required to pay the entrance and monthly service fees. However, the entrance fee will deliver care differently from type A housing. Modified care indicates that you receive a percentage of days per month of health care included in your package. Additional, occasional assistance will be charged outside market rates or an ongoing minimally discounted support rate stated in your contract.

For example, you may opt for having nursing assistance a few times a month but then require extra help due to a fall for a short time. You will receive the additional care; however, there will be an added fee for service as long as you require the extra help.

As with type A contracts, if you and your spouse need different levels of care, your monthly fees will be adjusted accordingly.

Fee For Service – Type C
This is the most independent living option of the three main types of contracts and tends to have lower entrance and monthly service fees. Housing and services are included, with access to short-term in-house care provided on an ad-hoc basis and usually charged at market rates.


Rental Communities – Another Alternative

Some retirees opt for senior rental communities, either in a standalone residence or a CCRC, rather than commit their funds to an entrance fee. Monthly to month rent resembles more of a lease agreement. There may not be many care services or amenities available, and you won’t necessarily receive priority access to health care services and usually pay market rates.


Services Included in Contracts

Within Continuing Care Retirement Communities, housing maintenance and utilities are included in your service fee, and basic inclusions may include:

  1. Dining – up to three meals a day with included snacks
  2. Housekeeping of your unit, usually weekly
  3. All utilities
  4. Onsite 24/7 security
  5. Grounds and residence maintenance
  6. Parking
  7. Personal emergency response systems
  8. Shuttle to appointments and shopping
  9. On and offsite entertainment and events
  10. Access to fitness facilities and leisure rooms

The list continues, and all amenities are included in your monthly service contract, regardless of care level. The only exceptions are usually a telephone, internet, and television services.

Choosing a retirement community that offers continuing care is a big step and requires research and preparation. Understanding what a contract entails and determining your incoming needs will help you make the right decision when selecting your new forever home.


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