Understanding CCRC Contract Types: Which Option Is Right for You?

As more seniors plan for their futures, Continuing Care Retirement Communities (CCRCs), also known as Life Plan Communities, are becoming a top choice. Why? CCRCs offer a comprehensive solution for aging in place, with a clear plan for long-term care.

What Is a CCRC?

An investment in the future,  a Continuing Care Retirement Community (CCRC), or Life Plan Community, is a senior living option that provides a full continuum of healthcare services within one community. These services include independent living, assisted living, memory care,  skilled nursing, and rehabilitation. The key advantage of CCRCs is that they allow residents to transition seamlessly between different levels of care as their health needs evolve, eliminating the need to move to a new community.

At Lake Forest Place, residents enjoy a fulfilling, independent lifestyle with the peace of mind that should their healthcare needs change, top-notch care will always be available right on-site. One of the most significant benefits of choosing a CCRC is the financial stability it provides—offering long-term care solutions in one location, giving  residents and their families invaluable peace of mind.

What Are the Different CCRC Contract Types?

CCRCs offer a variety of contract options, each designed to meet different financial and healthcare needs. The three most common contract types are Type A LifeCare contracts, Type B modified contracts, and Type C fee-for-service contracts. Each has distinct features, costs, and benefits. Some communities may offer only one type of contract, while others offer multiple options.

For example, Lake Forest Place provides residents with  Type A and Type B contracts, which begin in Independent Living and offer lifetime access to Assisted Living, Memory Care,  Skilled
Nursing, and Rehabilitation services on-site. These contracts provide predictable rates, often much lower than market rates for similar levels of care, ensuring long-term savings and financial predictability.

Note: CCRC contracts are not rental contracts. They require an entrance fee and a monthly service fee, which will vary depending on the contract type.

Which contract type is right for you? Let’s dive into the details of the three most common CCRC contracts so you can decide:

Type A (LifeCare)

Type A LifeCare contracts are ideal for seniors seeking long-term financial security and access to healthcare services. With a Type A contract, you pay an entrance fee and a monthly fee that covers all levels of care for life. While the up-front cost may be higher compared to other contracts, the monthly fee remains relatively stable, even if you need assisted living, memory care or skilled nursing in the future. This provides financial predictability throughout your retirement.

These contracts are highly valued because they protect residents from rising healthcare costs. You’ll know exactly what your costs will be years in advance, making financial planning easier. Residents also benefit from potential tax advantages tied to healthcare prepayments. Although modest inflationary increases may occur, the monthly fee remains unaffected by changes in your health. Should you require higher levels of care, you’ll continue paying the same monthly rate, providing seamless care without unexpected financial surprises.

Similar to long-term care insurance, Type A contracts are  preferred for those  prioritizing stable and predictable monthly payments.

Type B (Modified)

Type B modified contracts are perfect for seniors looking to balance up-front savings with some level of future healthcare protection. With Type B contracts, the entrance and monthly fees are lower than with Type A contracts, but access to higher levels of care, such as assisted living or skilled nursing, is provided at a discounted rate for a set period—typically 30 to 60 days. After that period, residents pay market rates for additional care.

This contract type is well-suited for individuals who anticipate minimal healthcare needs or plan for a shorter stay. However, it lacks long-term guarantees and may result in higher out-of-pocket healthcare costs if health needs change unexpectedly.

Type C (Fee-for-Service)

Type C contracts, also known as fee-for-service contracts, offer the lowest entrance and monthly fees among CCRC contract options. However, these savings come with trade-offs. Under a Type C contract, residents pay for healthcare services only when they need them, but at the full market rate. This can result in substantial cost increases if you require higher levels of care down the road.

While Type C contracts may be attractive for those with fewer financial resources or those who prefer to avoid paying up front for services they may never need, the lack of financial predictability poses a risk. If health needs arise, accessing care could significantly increase monthly costs, and these rates are subject to market fluctuations.

Why Choose Lake Forest Place?

At Lake Forest Place, we offer  Type A LifeCare and Type B Modified contracts, providing financial security, access to high-quality care, and a vibrant, independent lifestyle. Our Life Plan Community allows residents to age in place with confidence, knowing  they will always have access to the care they need. Discover why so many seniors choose to call Lake Forest Place home.

Contact us today by filling out the form or call 847-423-6679 to schedule a personal tour and get a detailed breakdown of the contracts that best fit your lifestyle and future care needs.