What Is a Lifecare Contract?
More than a few seniors, and seniors-to-be, have lost sleep worrying about how they’ll pay for rising healthcare costs as they age. A study by West Health and Gallup found that 45% of Americans admit to being afraid they’ll have to file for bankruptcy protection if faced with a major health crisis.
Unfortunately, Medicare will not be the safety net you thought you could count on. Typically, you should prepare to earmark at least 15% of your annual retirement expenses toward health-care-related expenses, including your Medicare premiums and out-of-pocket expenses. That is, unless you choose to live in a Life Plan Community that offers a Lifecare contract.
What to Expect in a Life Plan Community
As a resident in a Life Plan Community (also known as a Continuing Care Retirement Community or CCRC) like Crestwood Manor in Whiting, New Jersey, you’ll enjoy independent living at its best. Residents can choose from multiple floor plan options and enjoy maintenance-free living complete with resort-style amenities and a robust social calendar.
But the most important aspect of a Life Plan Community is the peace-of-mind it provides thanks to three types of senior living contracts you can choose from. Keep in mind that communities may offer one, two or all three types of contracts including the popular Lifecare contract Type A.
Understanding 3 Types of Senior Living Contracts
There are three types of contracts that may be available in the Life Plan Community you’re considering: Type A Lifecare Contract, Type B Modified Plan, and Type C Fee-for-Service. At Crestwood Manor, you’ll find traditional and refundable contract options, including Lifecare.
All three senior living contracts typically cover a variety of services (such as maintenance, linen service, housekeeping, dining) and amenities (such as fitness area, pool, classes, and clubs, and socialization activities). They also give you access to higher levels of onsite care, as described earlier in this blog post. But there are key differences in these three types of contracts.
Type A Contract––Lifecare Contract
The most robust of the senior living contracts available, Lifecare’s impressive features and benefits include:
Lifetime Coverage—You pay a one-time entrance fee and a monthly service fee. This ensures you’ll have a residence at this community for life, even if you outlive your resources and can no longer afford the full monthly fee. And if you or your spouse needs a higher level of care, you’ll often still just pay one monthly fee—plus the cost for any additional meals for the person who has moved to assisted living, skilled nursing, or memory care.
Continuum of Care––The security of knowing your present and future healthcare needs will be covered when it comes to long-term care needs, including assistance with the activities daily living (meal prep and eating, dressing/grooming, medication assistance, mobility assistance, bathing, advanced assistance with dementia/Alzheimer’s needs). You’ll never again have to deal with skyrocketing medical costs on the open market.
Guaranteed residence for life—You pay a one-time entrance fee and a monthly service fee. This guarantees you’ll have a residence at the community for life (even if you no longer have the resources to pay for it).
Estate security—The contract protects your estate thanks to predictable care costs. If you need or want to move, some, but not all, types of entrance fees may be partially refunded. Plus, your entrance fee may be tax deductible; consult your tax advisor for details.
Expert medical attention—You’ll be attended by a highly trained, person-centered staff of medical professionals. At Crestwood Manor, these include AMDA-certified medical director and physician presence, a full-time clinical care coordinator, RN clinic coordinators, nurse practitioners, and physical and occupational therapists.
Typically, a Lifecare contract won’t cover doctor visits; diagnostic testing; X-rays; medical equipment; medications; physical, occupational and speech therapies; or mental health services.
These services generally fall under what is covered in part by your Medicare plan. Depending on the type of plan you have, the rest is generally paid out of pocket. To confirm what services are covered under your plan, it’s important to speak with your insurance advisor.
Type B Contract—Modified Plan Life Care (also called Modified CCRC or Modified Agreement)
This type of contract includes housing, services, and amenities, with assisted living, memory care/support, and skilled nursing care typically provided in one of two ways:
- Limited Free Care—A limited number of free days included as part of the entrance fee, with additional care billed at per diem market rate.
- Discounted Rates—With this option, members receive an ongoing, minimally discounted rate for services they need. Healthcare services may be delivered on site or off site, and two monthly service fees may be incurred if couples require different levels of care.
Type C Contract––Fee-for-Service
With a fee-for-service contract, housing, services, and amenities are provided under a residence agreement. Access to long-term care, as needed, is typically guaranteed, but is charged at fee-for-service market rates. If the resident at some point requires care on a short-term basis, to maintain their independent living residence, that resident would be required to pay the monthly service fee on the independent living residence, plus the costs of housing and health care received in the assisted living, memory care, or skilled nursing residence.
Peace of Mind and a Great Life Begin at Crestwood Manor
You have so much to look forward to when you choose the independent living lifestyle! And when your new home is at Crestwood Manor, you also enjoy the security of living in a Life Plan Community that offers a Lifecare contract and the predictable costs it affords for health care if and when you need it. To learn more, contact us today, and we’ll share the details and, if you like, arrange a visit. We look forward to meeting you!