Because the services provided in a continuing care retirement community evolve throughout the time of residency to accommodate the needs of the residents, the rate charged will increase. There are three types of contracts commonly seen in CCRCs: extensive, modified and fee-for service.
Extensive Contracts
The extensive contract is an attractive option for many, as it ensures the resident is entitled to life-long care with no increase in the monthly fee. Typically, this is coupled with a higher entrance fee, similar to what one could expect to pay for a condo or house in the area. One important consideration, in regards to estate planning, is that after a set period of time, there is no refund based on years spent at the facility.
Modified Contracts
Modified contracts will generally require less of an upfront entrance fee, and is non-refundable after a set period of time. The difference between a modified and extensive contract is that the monthly fee will go up as services and needs increase. The upside to this type of contract is that you are more likely to receive a refund of the entry fee, at least a percentage of it.
Fee-for-Service Contracts
Fee-for-service contracts have the lowest entrance fees, and in some cases may have no entrance fee at all. These contracts begin with a lower monthly fee, and services are billed on a la cart method, you pay for only what you need. Remember, these fees will be billed at market rate.
Long-term care insurance is a good consideration when choosing modified or fee-for-service contracts. Consult with a qualified Cleveland elder law attorney to see what options you may have to offset the fees.
