CCRC Contract Types

The key feature of a CCRC that distinguishes it from other retirement living communities is access to a “continuum of care.” The continuum of care typically includes independent living, assisted living, and/or skilled nursing care.

Five Common Types of CCRC Contracts:

Type-A (Extensive or Life-Care):

All other things being equal (i.e. size of unit, services & amenities, location, etc.) this type of contract requires the highest entrance fee. In exchange, almost all residential services, amenities, and health-related services- such as assisted living or skilled nursing care, are provided with little or no increase in monthly fees, other than inflationary adjustments and ancillary expenses. In essence a resident of a CCRC with this type of contract pre-pays for future health-related services.

Type B (Modified): All other things being equal, this type of contract typically requires an entrance fee lower than that of the Type-A contract. It may include almost all of the same residential services and amenities that a Type-A offers. However, if assisted living or skilled nursing care is required, the resident will be responsible for some of the cost. Often the resident will have access to a pre-defined number of days in the health care center at no cost and/or healthcare services are offered at a discount off the market rate.

Type C (Fee-for-Service): All other things being equal, this type of contract typically requires the lowest entrance fee. Some or all of the same residential services and amenities may be provided, but if assisted living or skilled nursing care is required, the resident’s monthly fee will increase to reflect the full market rate for the cost of care.

Rental: Rental contracts require no entry fee or perhaps a nominal “community fee.” Often the monthly service fee may be higher than what you would pay in a comparable entry fee community since no money is collected up-front in the form of an entry-fee. Residents under this contract may have priority access to the healthcare facility but not necessarily guaranteed access. In other words, access to a continuum of care may not be contractually guaranteed. As with a Type C contract, the resident will pay the full market rate for healthcare.

Equity/Co-Op: An equity contract involves the actual purchase of real estate or ownership in a co-op as opposed to paying an entry-fee. A monthly service fee will still be required. Health care is generally available at the full market rate or at a slight discount.