The Life in Bloom Blog

Senior Living Contracts Explained: How Life Care Works

Planning for the Future | 09/20/21


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If you’re of a certain age, you’ve probably experienced how big a bite healthcare costs can take out of your wallet. You’re not alone. Seniors around the country are feeling it, too. And many are fighting back by securing a senior living contract offered by a select group of retirement communities.

To give you a better perspective on how widespread the concern over senior healthcare costs is, a 2019 article in The Washington Post announced that “One of the biggest threats to your retirement solvency may be the cost of healthcare and prescription drugs.” 

The statement was accompanied by a few sobering statistics gathered in a study by West Health and Gallup. For example, about 7 million seniors couldn’t afford to pay for their prescribed medication in the past 12 months. Of those medications, 80% are used to treat somewhat serious or very serious health conditions. Also troubling was the study’s finding that 45% of Americans are afraid they’ll have to file for bankruptcy protection if faced with a major health crisis.

Though Medicare is a big help, it won’t cover everything. In fact, it’s estimated that about 15% of the average retiree’s annual expenses will be used for healthcare-related expenses, including Medicare premiums and out-of-pocket expenses.

Getting older isn’t cheap — but the cost of care to keep you healthier can be controlled. One of the smartest ways to do this is by moving to a Life Plan Community and having a senior living contract. What follows is a look at how a senior living contract can work to your advantage.

 

What is a Life Plan Community?

A Life Plan Community (also known as a Continuing Care Retirement Community or CCRC) is a retirement community that encompasses all levels of lifestyle and care. You can move into an independent living setting and enjoy all the carefree amenities that come with it. Then, if you’ve  signed a Lifecare contract, you’re ensured predictable costs and priority access to a continuum of care, usually including on-site assisted living, memory care and skilled nursing whenever, and for as long as you need it.

As a resident of a Life Plan Community such as Meadow Lakes in East Windsor, New Jersey, you’ll enjoy an active, independent lifestyle with top-notch amenities and a robust social calendar. Plus, you’ll have your choice of spacious floor plans, so you can create a beautiful apartment and live life your way. 

 

Understanding Senior Living Contracts

There are three types of contracts available in today’s Life Plan Communities: Type A Lifecare, Type B Modified Plan, and Type C Fee-for-Service. At Meadow Lakes, we offer multiple contracts with traditional and refundable options, including Lifecare. 

With a Lifecare contract, Life Plan Community residents have the security of knowing their present and future healthcare needs will be covered and costs will be predictable. Lifecare guarantees the care you need, for as long as you need it, at rates that are the same or very close to what you pay in independent living and far less than you’d pay on the open market.

You can also count on high-quality care, all available on the same community campus — every level of care is available when you need it from an expert staff of medical professionals, all provided at affordable, “no surprises” costs below market rates.

All three senior living contracts cover a wide 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

Topline benefits and features include:

  • Lifetime Coverage — You pay a one-time entry 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.  
  • Continuum of Care — You have access to a full continuum of care at predictable, stable rates for the rest of your life. You’ll never again have to deal with skyrocketing medical costs on the open market.
  • Estate Protection — The contract protects your estate thanks to predictable care costs. And if you need or want to move, you receive a partial refund of your entrance fee. Plus, a portion of your entrance fee may be tax-deductible.

  • ADL Assistance — In addition to your residence, your contract covers long-term care needs including assistance with ADLs (Activities of Daily Living such as meal preparation and eating, dressing/grooming, medication assistance, mobility assistance, bathing, and more.)

 

Type B Contract Modified Plan (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: 

  1. A limited number of free days included as part of the entrance fee, with additional care billed at per diem market rate
  2. An ongoing, minimally discounted rate. Health care services may be delivered onsite or offsite, 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/support, or skilled nursing residence.

 

Your Worry-Free Senior Living Community Awaits.

Meadow Lakes is a beautiful senior living community offering the easygoing lifestyle you’ve been looking for. Most important, this is a Life Plan Community, so it’s backed by the security of a continuum of care right on campus if you ever need it.

Browse our beautiful independent living options, which include one- and two-bedroom apartments as well as cheery two-bedroom cottages. Then complete the contact request form to have one of our Meadow Lakes representatives give you a call. We can answer your questions and schedule a tour at your convenience. We look forward to meeting you!