Poring over your options when it comes to senior living can feel a bit like staring into a bowl of alphabet soup.
The senior living world is filled with terms you might not recognize and acronyms that aren’t always easy to decipher. Continuing care retirement communities (CCRCs) are no exception, and complicating matters are the various types of CCRCs, each of which has its own lettered name. In looking for your ideal senior living community, you may encounter a Type A, Type B or Type C CCRC.
While they share some similarities, each has its own nuances in terms of what and how you pay for higher levels of care.
First, What’s a CCRC?
By definition, a CCRC — which you may also hear called a Life Plan Community — provides a full continuum of care.
That means you have the assurance of priority access to additional health care services if your needs change over time. For example, in addition to independent living, Sedgebrook — a Life Plan Community in Lincolnshire, Illinois — also offers rehabilitation, assisted living memory care, skilled nursing and respite care, as well as home health for independent living residents who need a little extra help for one reason or another.
Many seniors choose a CCRC or Life Plan Community because it offers an independent living lifestyle and amenities they find appealing, while also providing a secure plan for navigating the inevitable unknowns that come with aging. A CCRC puts you in control of your own retirement.
How Do Type A, Type B and Type C CCRCs Compare?
In the simplest terms, the differences among the three types of CCRCs come down to how much you pay, and when. Generally, the more you pay up front, the more predictable your monthly payments will be in the future.
With each type, in addition to a one-time, partially refundable admission payment, you can expect to pay a monthly service fee, which typically includes your apartment home, as well as services like indoor and outdoor maintenance, meals, security, transportation, property taxes, and access to all of the community’s amenities.
Also known as Life Care or an Extensive Agreement CCRC, a Type A plan provides unlimited access to health care for life with predictable monthly service fees and little to no increase over independent living rates, even when additional levels of care are needed.
Pros: Residents know exactly what they’ll pay, and that predictability is helpful for budgeting and financial planning. Considering the steady rise in health care costs, residents typically end up paying far less than open market rates.
Cons: The Type A plan comes with the largest expenses; the upfront admission payment is bigger than the other options because the payment helps offset the cost of future health care, and the monthly service fees tend to be higher, as well. Another downside is the potential of paying premium rates for care you don’t use.
With a Type B plan, which you may also see called a Modified Plan or Modified Agreement, residents might either have access to ongoing care at a rate slightly lower than the open market, or they might have a set number of complimentary days to access additional levels of care (with days exceeding that threshold billed at daily market rates). Depending on the contract, allocated days may either be per year or for the duration of the contract. In some cases they accumulate if unused; other contracts stipulate that they expire.
Pros: Admission payments for a Modified Plan tend to be lower than a Type A plan.
Cons: Care may or may not be delivered onsite, and if you exceed your contracted allotment, you may have considerably higher costs as your needs increase over time.
Also known as a Fee-for-Service Agreement or Fee-for-Service Contract, a Type C plan provides priority access to long-term care, but the care is offered at current market rates. At Sedgebrook, which is a Type C CCRC, residents who need a higher level of care simply create a new contract based on that care.
Pros: A Type C CCRC is generally less costly upfront than the other plan types, and the monthly service fees tend to be lower, as well. Another reason some residents are drawn to Type C CCRCs is the ability to avoid paying for care they don’t need. In addition, the guarantee of access to care (even if it is a higher rate) makes this an attractive option for many seniors.
Cons: The trade-off for lower admission payments and lower monthly service fees at a Type C CCRC is paying market rates for any additional care you receive, if and when you need it.
Need More Help Decoding Your Retirement Options?
Our professional team will happily talk through your personal circumstances and discuss the ways a Life Plan Community like Sedgebrook could offer the retirement lifestyle and peace of mind you want for your future. You’re welcome to send us your questions, or we’d love to have the chance to get to know you in person.