What is Life Care and Why is it Worth the Investment?
If you’ve done any research into your senior living options, you know one thing for certain: There’s an alphabet soup of terms out there.
You’ve probably come across terms and acronyms like Life Plan Community, Continuing Care Retirement Community (CCRC), Life Care, assisted living (AL), skilled nursing (SN) and memory care (you guessed it: MC). And you might have read about different types of contracts, like A, B and C. What you might not have encountered is a clear explanation of these terms, so that you can confidently choose what’s right for you and your future.
So forgive us for saying this now, because it might sound befuddling at first: A Life Plan Community is the exact same thing as a CCRC. And all Life Care communities are Life Plan Communities. But not all Life Plan Communities offer Life Care.
Wait, what? We understand your confusion. So we’ll explain that paragraph in much better detail. Our goal is that once you’ve read through our blog about Life Care and Life Plan Communities, you’ll understand exactly what we’re saying above. And if we’ve done our job well, you’ll have a much better idea of what type of community might be right for you.
WHAT IS A LIFE PLAN COMMUNITY?
A Life Plan Community was once referred to as a Continuing Care Retirement Community. But in 2016, senior advocacy groups worked together to change the name to a term that more accurately described their communities. They did it because Continuing Care Retirement Communities do offer a continuum of care, which is usually independent living, assisted living, skilled nursing and sometimes memory care. But changing to the term “Life Plan Community” describes what their communities truly offer: A community that provides older adults with a plan for the rest of their lives.
How it works: Usually, you enter a Life Plan Community as in independent living resident. You pay an up-front entrance fee, and then pay a monthly service fee that covers things like your residence, your meals, housekeeping, maintenance, and other community services and amenities.
If you ever need it, you have access to the community’s onsite long-term care – which is commonly assisted living, skilled nursing and sometimes memory care. This gives you a plan for dealing with possible health care issues and prevents additional moves to other care facilities off-campus if you need higher levels of care.
If you have a spouse, he or she can continue to live in the independent living residence on campus and if they ever need it, they can receive different levels of care, too.
The advantages: Both of you are able to live the rest of your lives at the same community without additional moves. And you’re in control: No one has to make decisions for you during a health crisis.
The disadvantages: We mentioned you will have access, but you may not have guaranteed access. If a non-resident (someone from outside the community) needs a level of care, they may get the last assisted living or skilled nursing room or bed available, not you.
Another disadvantage is that you may pay much more per month for each level of care than you pay in independent living. Sometimes there may be discounts for residents, but typically what you pay will be out of your own pocket. Even if your community is Medicare-certified (and not all are), Medicare doesn’t pay for long-term care, which is care that’s required for longer than 100 days.
WHAT IS LIFE CARE?
Here’s the tricky part: Life Care is a type of entrance fee financial contract a Life Plan Community offers. Which is why we said that not all Life Plan Communities offer Life Care.
Life Care is considered the gold standard of senior living health contracts. It assures that you have long-term care for life. It also guarantees that you will pay about the same monthly for higher levels of care that you paid as an independent living resident.
How it works: As with a Life Plan Community, you pay an up-front entrance fee and a monthly service fee. However, if you choose a Life Care contract, your entrance fee will be a much larger amount, though in some communities your entrance fee may be partially or fully refundable.
You pay a hefty up-front entrance fee because you’re not only paying for lifetime residency and use of all community services and amenities. You’re also essentially pre-paying on the assumption you’ll need care in the future. And that’s a safe bet: One government study showed 70% of people over 65 will need long-term care sometime in their lives.
However, you’re paying more up front so that if you or your spouse does need care, you both have guaranteed access. You’ll also pay little to no increase in your monthly fees, no matter how your health needs may change in the future.
Life Care means just that: Care for life. You’re guaranteed access to higher levels of care, for life. You also know who will be providing that care to you, and exactly what it will cost you, for life.
The advantages: Care, for life, with little to no increases in your monthly service fee. You receive the care you need when you need it, in the community you call home, from trusted professionals who treat you like family.
Another advantage? Your Life Care fee is fully tax deductible. You can also qualify for a tax deduction on monthly fees as they are recognized as a charge or prepayment for future health care services.
The disadvantages: Some people don’t want to pay up front for care they may never need. And some seniors don’t have the nest egg to be able to afford a Life Care contract. However, many communities offer other contracts to choose from.
WHAT TYPES OF CONTRACTS ARE OUT THERE?
Type A: That’s Life Care. As we mentioned, Life Care is a type of contract, and some Life Plan Communities offer Life Care. It’s the gold standard.
Type B: Also known as a modified plan, Type B contracts include housing, services and amenities. If you need health care, you get it either through a limited number of free days, and then you pay per diem market rates for additional care, OR you receive an ongoing, minimally discounted rate. You might also have to pay two monthly service fees if you move into a higher level of care and your spouse stays in independent living.
Type C or Fee-For-Service: Housing, services and amenities are provided, but if you need care you’re paying market rates. If you need short-term care, you pay two monthly services: that for your independent living residence AND the fee for the level of care you’re in. All levels of care might not be available in your community, so you may have to move as your needs change.
- A Life Plan Community is the exact same thing as a CCRC.
- A Life Care community is still a Life Plan Community. But,
- Not all Life Plan Communities offer Life Care.
So what type of community is right for you and your spouse, and for your health and financial needs? The senior living team at Searstone Retirement Community can help you figure that out. Get started by contacting us, or by calling us at 919.234.0339.