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CCRC Contract Type B – Modified Contract

Continuing care retirement communities (CCRC) have three basic contracts and two outliers. Here we look at CCRC Type B contracts or “Modified” contracts. The modified contract differs from lifecare because future care has a limit.

Modified Or CCRC Contract Type B

Type B contracts time limit the resident’s future care benefits. The Ager still pays an entrance fee and ongoing monthly fees, although less than in a Type A contract, for the right to stay in an independent living unit. However, the resident’s future care needs in a nursing or rehabilitative facility, or in assisted living are limited. These limits can be time-based (a certain number of free days each year) or the can be cost-based (the resident pays a fee for use of these care facilities).

Costs of CCRC Type B Contracts

Like Type A contracts, Type B contracts also require large upfront buy-ins and monthly fees, just not as large as Type A contracts. Type B contracts are trying to target seniors that want to buy into an independent living facility with other care options on campus or nearby. The “buy-in” is usually between $250,000 and $1 million. The number of covered days and the rate for longer stays vary. The contract will explain how these are calculated. Covered fees are often based on days or discounts from what an outsider would pay. However, it’s not uncommon for Type B contract to end all future care benefits at some point and charge current rates. The higher fees are usually the regular per-diem rate charged to those admitted from outside the CCRC.

Make Sure To Get Answers To These Questions

  • Exactly what services are included in my CCRC Type B contract, and what services aren’t included? In other words, at no additional costs, what services do I get?
  • What future care benefits do I get (a fixed number of free days in a higher level of care facilities, a discount in a higher level of care facility, etc.)?
  • How are my free days calculated (e.g., X days per year, per quarter, do these days accumulate over time, etc.)?
  • Does my Modified contract allow me to pay more to purchase additional days?
  • What happens to my buy-in if I leave early (i.e., can I recoup anything)?
  • What happens to my buy-in if I pass after a year or two (i.e., can my estate recoup any of my buy-in)?

Review The Other Contract Options

Before moving on, make sure you’ve also reviewed Contract A and Contract C. They are very different and have a substantial impact on short and long-term costs.