Comparing CCRC options for ala carte, tiered, all-inclusive and Life Care communities
Understanding options in the continuing care retirement community (CCRC) market can be enough to make your head spin.
Ala carte, discounted or all-inclusive services, Life Care communities… the differences are often bewildering, but make an immense difference in costs.
Did you know CCRCs have recently been renamed life plan communities? It can be a bit confusing, but they’re the same thing. Life plan communities and Life Care communities are NOT the same thing, however. Keep reading for details.
What do CCRCs have in common?
Location and amenities will differ from community to community, but you’ll see similar arrangements when it comes to the housing choices. Whether it’s a month-to-month CCRC or something longer-term, each will have a variety of floor plans, upgrade options and other features.
CCRCs are known for their vibrant, active lifestyles tailored to helping residents remain as independent as possible. They’re connected by an empowering focus on independent living as a result of a health and wellness lifestyle. Social and intellectual activities, dining options with nutritious meals designed to provide optimal nutrition to the needs of older adults, a variety of fitness amenities are all common aspects of a CCRC lifestyle, although the luxuriousness, features and variety differ from community to community.
The lock-and leave benefit is also very attractive, leaving residents with zero responsibilities for utility bills, housekeeping or home maintenance.
Someone in need of assisted living or memory care wouldn’t be eligible to join, since all CCRCs require their residents be able to care for themselves when moving in.
How most CCRCs differ
As a leading retirement destination, Arizona offers a dizzying array of choices for CCRCs, but it’s the care options that influence costs the most.
No matter what plan you decide on, CCRCs are typically far less expensive than privately paying for long-term care. Costs not covered by Medicare, health insurance and long-term care insurance can be staggering.
All continuing care retirement communities provide varying levels of care designed to cover the full continuum of care, should the resident become unable to continue living independently after they’ve become a resident. The level of care and price paid for that care determine the monthly fees and entrance fee, so it’s essential to understand exactly what you are getting for your money.
For most, it comes down to a financial decision. How much of an upfront fee and monthly payment am I willing to make? What can I afford and how comfortable am I with the risk of future long-term care costs? How long do I plan to stay in the community? Do I want the Life Care guarantee?
Rental or month-to-month CCRCs
Most CCRCs offer some of contract, although rental CCRCs may be available on a month-to-month basis without a contract. These don’t provide the peace-of-mind from a financial perspective that a deeper commitment to a CCRC can provide, but it can be very cost effective… unless long-term care is needed.
The ala carte approach may offer a wide variety of care services, but it’s typically at full price or with a slight discount. The resident is paying for the housing, amenities and general access to care on a fee-for-service basis. They’re essentially renting services on an as-needed basis, rather than paying for them in advance.
This ala carte approach is also true at rental CCRCs that offer no contract at all.
A step up from the pay-for-service model, CCRCs that offer tiered care pricing often include a specific amount of care, outlined in a contract the resident signs at move-in.
The entrance fee and monthly payments are pre-paying for the included care, along with housing and amenities.
Additional care is available at a discounted rate, such as memory care for someone diagnosed with Alzheimer’s disease, another dementia, or Parkinson’s disease.
Most CCRCs offer the option of unlimited, all-inclusive access to all resources at the community, including independent living, assisted living, skilled nursing and memory care. It’s a comforting option designed to provide peace-of-mind to the resident, knowing that no matter what level of care is required, the monthly fee remains the same.
Because the resident is basically pre-paying for their long-term care needs, the monthly fee and entrance fee reflect the step up in protection.
Because it’s common for the need of long-term care to extend for three years or longer in the 75+ crowd, and many dementia’s and neurological disorders can result in full-time residency in a memory care unit for years, even decades at a time─all-inclusive coverage can be very reassuring.
It helps to ease concerns about the future costs of care, although the next level of community is the only option that completely protects the financial assets of an estate. Let me explain.
The Life Care Difference
In addition to the all-inclusive care option available at some CCRCs, some offer an additional distinction that’s especially important to the “planners” among us. It’s called Life Care.
Unsure of the difference between long-term care insurance versus Life Care plans? Click here to learn more.
Unlike general CCRC contracts that only apply as long as a resident has the financial means to continue making payments each month, Life Care communities guarantee housing, care and services won’t change if something should happen to the resident’s financial standing.
It provides impressive peace-of-mind to the resident with a contractual guarantee they’re completely protected financially, no matter what might lie ahead. They have a place to live, and they have long-term care.
Life Care communities often offer tiered and all-inclusive options, but all contracts at a Life Care community include the guarantee. It’s not something included only with the all-inclusive plan, or available as an added option.
What exactly does the guarantee mean? A resident can’t give away their money to a relative to avoid paying for their care, of course, but they’re protected from the impact of any financial losses outside of their control, such as a major recession.
If we should be hit with another Great Depression, for example, they can remain in the community with no change to their lifestyle if they suddenly aren’t able to make the monthly payments.
Life Care communities are the ultimate protection against future “what-if’s.” It’s also a reassuring way to budget, since costs are stable and substantially less expensive than privately paying for long-term care.
Keep this in mind
All CCRC contracts should outline any applicable refund policies of the entrance fee that might apply, the cost of monthly payments for the plan and housing unit selected, and language for any potential increases of the monthly fee that might be expected.
This includes Life Care contracts, since they are a type of CCRC. However, they also include language about the guarantee, a promise regulated by Arizona’s Department of Insurance.
Since CCRCs can differ tremendously from property to property and state to state, it’s essential to ask detailed questions at each one you are considering to compare them accurately.
What is the potential costs of ala carte care services, if you’re considering a month-to-month arrangement? What is the long-term impact of each level of care, should something happen? Is full-time residency in its memory care facility affordable? What happens if the need for long-term care is extensive? What happens if your financial circumstances change? What happens if your health status changes before the contract is finalized?
Learn more about CCRCs and the Life Care option, we welcome you to attend an upcoming workshop near you. To speak to someone immediately, please contact Jackie Lusson, our corporate director of sales, at 623-236-3767.
(Originally published Feb. 7, 2018; last updated Jan. 11, 2019.)