One major challenge facing the senior living industry is consumer confusion caused by the many terms used to describe different provider types. For continuing care retirement communities (CCRCs), also called life plan communities, an added layer of uncertainty comes from the variety of residency contract types. Confusion hurts both the industry and the consumer: it can slow a prospective resident’s decision-making and cause frustration, wasted time, or even a poor choice for the consumer.
Continuing care retirement communities offer a full continuum of care, typically starting with independent living and also including assisted living, memory care, and skilled nursing—often all on the same campus. That continuum gives residents peace of mind: many live independently now but want a clear plan for future care needs. Unlike some other senior living models, most CCRCs provide contractual priority access to on-campus care services through a formal residency agreement.
There are five common contract categories found in the market:
- Type A (lifecare)
- Type B (modified fee-for-service)
- Type C (fee-for-service)
- Equity/Co-Op
- Rental
Many CCRCs require an entry fee, but not all. Some communities offer rental contracts, and others operate under an equity or ownership model where the resident actually owns their home. A useful way to clarify differences is to categorize contracts by two dimensions: the buy-in requirement (entry fee, equity, or no buy-in) and the monthly fee structure (lifecare/all-inclusive, modified, or fee-for-service). The table below summarizes these combinations.
|
Entry Fee Model |
Equity Model |
No Buy-In (Rental) |
|
| Type A (lifecare) Contract | Yes |
No |
No |
| Type B (modified) Contract | Yes | Yes |
No |
| Type C (fee for service) Contract | Yes | Yes | No |
Note: Rental contracts typically do not provide contractual priority access to care services and may carry higher monthly fees than entry-fee options.
The table’s rows show the different contract types and the columns display the buy-in model. For example, rental contracts always follow a fee-for-service approach: residents do not pay an entry fee but will pay market rates for any care services they use. Equity contracts often follow a similar fee-for-service approach depending on the community. By contrast, entry-fee communities, and especially lifecare (Type A) contracts, tend to be more all-inclusive. Under a lifecare model, a resident pays an upfront entry fee and then pays a monthly fee that is intended to remain relatively stable over time, regardless of how much care the resident eventually requires.
Organizing contract information this way makes it easier to explain what a CCRC residency agreement entails. You can simply identify the community’s buy-in model and monthly fee structure—for instance, “This community requires an entry fee and operates under a lifecare, all-inclusive model”—and then discuss the specific financial and care details. The same framework also simplifies comparing two different communities and their contract offerings.
Are you considering a continuing care retirement community for yourself or a loved one? Carefully reviewing the buy-in requirement and the monthly fee structure is one of the best first steps toward making an informed decision.