By Nancy Opiela

As you read through brochures for continuing care retirement communities (CCRCs), you’ll come across the term “life care,” but you might be uncertain what it means. That’s no surprise, as the meaning varies from state to state and from community to community. •“There are CCRCs that say they will ‘take care of your life care’ or ‘provide the care you need for the rest of your life,’ but that doesn’t mean they are ‘life care’ communities,” says Carol Raj, director of admissions for a retirement community in Northern California. • Take California as an example: Just one-third (19 of 57) of the state’s CCRCs are life care communities, according to Raj. In that state, the more general CCRC contract includes a promise, expressed or implied, by a CCRC to provide one or more elements of care to an elderly resident for the duration of his or her life or for a term in excess of one year, in exchange for the payment of an entrance fee, the payment of periodic charges, or both types of payments.

A California life care contract, by contrast, is a continuing care contract that includes a promise, expressed or implied, by a CCRC to “provide routine services at all levels of care, including acute care and physicians’ and surgeons’ services, to a resident for the duration of his or her life.”

Three care contracts

In many states, there are three distinct contracts under the life care contract umbrella, says Doug Pace, director of assisted living and continuing care, American Association of Homes and Services for the Aging (AAHSA). What life care communities provide depends on the individual state’s definition of life care and what level of contract you choose.

The type A contract, also referred to as an extensive or complete care contract, involves an entrance fee and a monthly payment that does not change based on the level of care you require. Because all your care is provided at no extra cost, you transfer the risks of uncertain future health care costs to the life care community.

The modified, or type B, contract involves a lower entrance fee, set monthly payments, and stipulations limiting the time you can stay in skilled nursing care. For example, after 30 days you could be required to pay for skilled nursing care, perhaps at a discounted rate.

The type C contract is a fee-for-services contract with a substantially lower entrance fee where you pay for all health care services you might need down the road. Although these contracts are more affordable in the short-run, they don’t provide the financial security of extensive or modified contracts.

The lesson here, says Pace, is to read the contract’s fine print. “Just because you sign a life care contract, you can’t assume all your health care expenses will be taken care of for the rest of your life,” he says.

Factors to compare

The differences between life care contracts combined with different state regulations make comparisons between life care communities difficult. Although there are no national standards, the Continuing Care Accreditation Commission (CCAC), which was acquired by the Commission on Accreditation of Rehabilitation Facilities (CARF) in 2003, serves as the nation’s only accrediting body for CCRCs.

As Raj explains, “The CCAC doesn’t evaluate life care communities based on minimum standards as state agencies do, but rather measures them against the highest standards for governance and administration, financial strength, and care and services provided.”

In addition to checking for CCAC accreditation, there are a number of additional variables to evaluate when choosing a life care contract. First, keep in mind that life care can mean more than housing and health care. CCRCs offer extensive services and amenities from home maintenance and dining services to security, housekeeping, and laundry services.

Additionally, the community you’re considering might have a fitness center, swimming pool, golf course, or tennis courts or provide social activities, transportation to events and shopping, or educational activities. Depending on your contract, these services can be paid for with your one-time entrance fee, monthly fees that are fixed regardless of services used, or monthly fees that vary with use of services.

Note, too, that some life care contracts offer a partial refund of your entrance fee should you die soon after moving to the community. “Refund percentages vary,” says Pace. “You might get 90 percent in the first year, or 20 percent if you’ve lived in the community for eight years.”
Finally, if you run out of money, some life care communities will help you transition to Medicaid, while charitable or faith-based communities often have programs that subsidize members who run out of money.

Look before leaping

When deciding on a life care community, both Raj and Pace have simple advice: Do your homework.

“Take your time,” says Raj. “I’d recommend at least three years of thinking and evaluating before making a move to a life care community. It’s important to visit a number of communities, even if they are in an area you don’t think you want to live in. Exposure to a variety of communities will trigger questions that you may want to take back to the community you are considering most seriously.”

Resources Pace recommends include the 2005 AAHSA Directory of Members, which lists 5,600 non-profit nursing homes, retirement communities, and senior housing organizations, and AAHSA’s Continuing Care Retirement Communities 2005 Profile. Both are available through AAHSA’s bookstore at www.aahsa.org.