For older adults who are considering a move to a continuing care retirement community (CCRC, also known as a life plan community), the sheer number of contract options can feel overwhelming. Many CCRCs offer multiple types of contracts, each with their own financial structure and implications for long-term care costs.
But there’s a noteworthy evolution in one of the most popular CCRC contract models: a variation on the traditional Lifecare (Type A) contract called “equalized rate pricing.” This pricing approach may offer greater transparency and fairness, and it might be especially appealing to today’s financially savvy senior living prospects. Over the past few years, some CCRC providers have even begun offering equalized rate pricing instead of the traditional “true” lifecare contract model.
>> Related: CCRC, Life Plan, Lifecare: What are the Differences?
A quick overview of traditional CCRC contract types
To simplify the comparison between the traditional types of CCRC contracts, let’s assume that all factors (e.g., residence size, amenities, and location) are equal. Here’s a breakdown of the four main CCRC contract types:
Lifecare (Type A) contract
This is the most comprehensive and typically the most expensive CCRC contract type in the beginning. However, if the resident ends up needing extensive care in the future, it could be less costly over the long term. Lifecare contracts (also called Type A contracts) usually include:
- A higher entry fee and/or monthly fee while the resident lives in independent living.
- Access to assisted living, memory care, or skilled nursing care if needed, with little or no increase in monthly costs.
So, all other things being equal, a Type A contract will typically cost more initially but could save money later while adding cost predictability.
Why people choose it: One word: predictability. Type A lifecare contracts provide long-term financial stability because a portion of their cost goes to a healthcare reserve fund that helps offset costs for any necessary future care, helping ensure residents don’t pay more for care when needed.
Modified (Type B) contract
Sometimes considered a middle-ground option, modified contracts (Type B) usually:
- Have lower entry and monthly fees than Type A lifecare contracts
- Include a set number of days of healthcare at no additional cost or a discounted rate on care services
Why people choose it: Type B modified contracts are often more affordable up front while still offering some financial protection against any future care costs.
Fee-for-Service (Type C) contract
A fee-for-service contract is usually less expensive now, but can be more expensive in the future if care is ever needed. This contract type typically includes:
- The lowest entry and/or monthly fees of the three main CCRC contract types
- Healthcare services billed at full market rate if and when needed
Why people choose it: A Type C fee-for service contract provides lower upfront costs and more flexibility but with the understanding that future care could be costly. However, the resident will only pay for care if they end up needing it.
Rental CCRC contract
Unlike the above contract types, rental CCRC contracts are usually month-to-month agreements with:
- No or low entry fee (sometimes just a small community or application fee)
- Higher monthly service fees
- A fee-for-service care model, with no guarantees of long-term care availability or price locks
Why people choose it: A rental CCRC contract offers flexibility and a low barrier to entry, which may be ideal for prospects who are unsure about long-term plans or unable to pay a large entrance fee.
>> Related: A Primer on CCRC Residency Contracts
A twist on the lifecare contract: Equalized pricing
The traditional Type A lifecare contract appeals to many CCRC prospects due to the financial predictability it offers for future healthcare expenses.
Some residents criticize this model as being unfair, however, because those living in more affordable CCRC residential units continue paying their lower independent living rate even when they transition to higher-cost care settings. Residents of larger, more expensive independent living units, on the other hand, keep paying at the higher rate if they move to a care setting, regardless of the fact that they no longer live in those larger homes.
To address this resident feedback, some CCRCs have introduced equalized pricing within their Type A lifecare contracts. Typically, here’s how equalized pricing works:
- When a resident permanently moves to assisted living or skilled nursing care, their monthly fee is adjusted to match the median monthly cost of all independent living residences in the community.
- This means:
- Residents from smaller, lower-cost units may see a moderate increase in their monthly fees.
- Residents from larger, higher-cost units may see their monthly fees decrease a bit.
This approach equalizes the cost of care across the community, promoting greater financial fairness and cost-sharing.
>> Related: How Will You Fund a Move to a Life Plan Community?
A note on double-occupancy couples and equalized pricing
For couples that have equalized rates, each resident will pay the stated cost for care. So, if both residents were to require care, they would go from paying the double occupancy rate in independent living to each person paying the individual stated cost of care.
It’s worth noting that in this scenario, even if the residents live in the community’s median-priced independent living unit (upon which equalized rates are typically based), they would still pay more as a couple because both residents will pay the equalized rate when they need care.
It is important to understand that this is different from true lifecare where the independent living double occupancy rate remains in place even if either or both people require care.
Why equalized pricing matters
According to the Genworth Cost of Care Survey, the national median cost for assisted living in 2025 is $6,077 per month, and skilled nursing care tops $9,555 a month for a semi-private room. And these are just averages; these figures may be substantially more in some areas.
With care expenses like these continuing to rise, cost predictability and equitable pricing are becoming top priorities for many older adults and their families. A CCRC contract that utilizes equalized pricing can help residents better plan for their financial future while also ensuring they can access the care they may need one day.
There’s another advantage to an equalized pricing contract format that both communities and prospects should consider. It encourages CCRC residents to choose independent living units that suit their lifestyle needs rather than being driven solely by financial considerations related to future care transitions and costs.
>> Related: How a Couple’s CCRC Fees Adjust If One Person Requires Care
Is an equalized pricing lifecare contract right for you?
For some older adults, a CCRC offers the freedom to live independently with the peace of mind that comes with knowing you have access to a continuum of care services, if needed down the road. If you’re evaluating your CCRC options, it’s important to:
- Understand all contract types thoroughly and ask what is (and isn’t) included with each.
- Ask whether the community offers equalized pricing or a true lifecare (Type A) contract. If it is equalized pricing, ask how the rates are calculated.
- Consider the impact on couples, especially if one partner moves to a higher level of care while the other remains in independent living. (As discussed above, equalized rates may apply individually, which can affect your overall financial planning.)
While no single CCRC contract type fits all prospects’ needs and goals, the growing availability of equalized pricing lifecare contracts offers a new option for those seeking both financial stability and fairness in their long-term care costs.
As more CCRCs adopt this contract model into their menu of options, it may ultimately become an industry standard, offering CCRC residents greater confidence that any future care will be both accessible and equitably priced.
Originally posted May 5, 2016; updated June 17, 2025
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