One of the many selling points of a continuing care retirement community (CCRC, also known as a “life plan community”) is the onsite care services that are provided to residents. Spanning the full continuum of seniors’ potential needs, a CCRC offers everything from maintenance and maid service for healthy residents in independent living units to memory care and skilled nursing care in the healthcare facility for those who have major health concerns.

The need for care services at CCRCs, including assisted living and skilled nursing care, can be split into two basic categories: temporary care or permanent care. Think of it like this: A resident who lives in an independent living unit at the CCRC has a knee replaced and will need rehab services for several weeks while they recuperate. However, assuming they are otherwise healthy and are diligent with their physical therapy, they will most likely be able to make a full recovery from the surgery and go back to living independently. On the other hand, consider a resident who has a massive stroke, which leads to other significant health problems. Unfortunately, they will need skilled care for the remainder of their life.

>> Related: CCRCs Keep Couples Close in Sickness and Health

Different CCRC contracts = Different terms & fees for care

A common question I hear from prospective residents of a CCRC during my travels to speak at various communities is, “What happens to my monthly fee at a CCRC if/when I require care services in the healthcare center?” This is an astute question, and it is important to get this question answered by each CCRC you are considering because their responses will likely vary depending on the type of contract(s) they offer.

There are several different types of residency contracts offered by CCRCs. For each one, prospective residents need to understand what happens to their monthly fees if they ultimately require assisted living services or skilled nursing care. Click here for an easy-to-understand summary of the types of CCRC contracts.

All other things being equal, there is generally a trade-off between the amount of the entry fee and/or monthly fees that you pay while living independently, and the amount you will ultimately pay if you require healthcare services. With some contracts, you will pay less while independent and more later. With other types–often referred to as lifecare contracts–you will pay more early on but less (compared to the then-current market rate) if/when you require a higher level of care.

Temporary or permanent care

There is another important aspect to this question and it pertains to whether or not you will continue paying for your independent living residence when you require care services. In the case of a temporary stay in the healthcare facility, a resident may still be required to pay for their independent living residence in addition to any applicable cost associated with care services. Once it is deemed to be a permanent transfer to the healthcare facility, then the resident will be required to release their independent living residence and, usually, monthly fees for the independent living residence will cease at that time.

Understanding the fine print

To help you know what to be looking for within the contracts of the CCRCs you are considering, here is an excerpt from a CCRC contract showing the type of language you might find regarding the fees associated with care in this particular community’s healthcare facility.

A single resident in need of health center services will continue to pay the same single occupancy monthly fee for the living unit while receiving care for up to 90 cumulative days. When transferring to a higher level of care on a permanent basis, the resident may surrender his living unit and then pay the current single occupancy monthly fee for a one-bedroom deluxe apartment or the monthly fee for surrendered unit, whichever is less. Extra charges for medical supplies and services apply.

Bear in mind that this is sample language from only one CCRC contract; others may be different. For example, some say that if one spouse needs permanent healthcare and the other remains independent, then the monthly cost will drop to reflect the cost of single occupancy for the resident in independent living, while the second resident pays the cost associated with receiving care in the healthcare center. But remember that in the case of a lifecare contract, the couple may continue paying the same monthly rate as they paid previously.

>> Analyzing the CCRC Residency Contract: A Sample Case Study

What to ask

The bottom line is that you should know that CCRCs’ prices can adjust based on whether you require temporary or permanent care. So be sure to do your due diligence to learn up front how your expenses may be impacted. Here are a few questions prospective residents should ask the management at each of the CCRCs they are considering:

  • What defines temporary versus permanent care at your facility?
  • Who decides if the care I need is deemed temporary or permanent?
  • What is the process of “surrendering” an independent living unit? If I am not able to make this decision for myself, who does?

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