CCRC Contracts Defined

Explaining CCRC Contract Types: A Guide to Get You Started

A Continuing Care Retirement Community, or CCRC, is the exact same thing as a Life Plan Community. (Harrogate uses the term Life Plan Community.) But not all CCRCs (or Life Plan Communities) are created equal. Confused? Here’s a guide with detailed information to help you keep it all straight.

Throughout this article, you’ll see the more commonly recognized term, CCRC, when referring to communities. And to help you make sense of all the CCRC options available to you, here’s some of what we’ll cover: CCRC contract types, specifically what a CCRC Life Care contract is, and the fee structure of a CCRC. We’ll also discuss one of the benefits of choosing a CCRC — the entrance fee tax deduction.

CCRC CONTRACT TYPES.

There are several types of CCRCs and CCRC contract types out there – let’s break it down.

Type A, also referred to as Life Care:
At a Life Care community, you pay a one-time fee before you move in, which can offer refundability to you or your estate. After you move in, you also pay a monthly service fee, which we’ll explain a bit later. Type A contracts often ensure a few things: No matter what level of living you choose when you move to the community, you’ll usually have a home providing you unlimited priority access to all levels of care the community offers at predictable rates, for life. And generally, you’ll pay less for any care you need than you would on the open market. If you or your spouse need different levels of care, you’ll often pay just one monthly fee plus a nominal increase in the fee for your spouse.

Type B, often called a modified Life Care:
These communities include housing and services and amenities. Just like at a Type A community, you’ll pay a one-time entrance fee and your monthly service fee. However, the care structure is vastly different.

As part of your entrance fee, you may receive care in one of two ways:

A limited number of free days of health care, with additional days billed at per diem market rates, or an ongoing, minimally discounted rate. However, if you and your spouse need different levels of care, you may end up paying two monthly service fees to cover those two different care levels.

Type C, also known as fee-for-service:
Housing and services are provided, and the entrance fee and monthly service fee tend to be lower than with the other two contract types. You may have access to care, but it will be charged at full market rates, which are typically significantly higher than a Type A or B contract. Also, if you live in independent living but need care on a short-term basis, you will be required to pay your monthly service fee for your independent living residence plus the costs of housing and the health care your spouse receives.

Rental:
Not all CCRCs require an entrance fee — rental communities operate more like a leasing agent, charging you rent by the month. Some rental communities may have year-long leases; others are literally month-to-month obligations. People who choose rentals may prefer both the flexibility and the fact their money isn’t tied up in an entrance fee. However, because they only collect one fee, fewer dollars are spent on services and more are spent on debt services and emergency capital improvements. The monthly service fee could also increase more quickly to produce additional revenue. And many rental contracts don’t provide you with priority access to health care services — so any available space on the health care side of the community can be given to someone outside the community, instead of to you when you need it most. And you’ll pay full market rates for that care just like a fee-for-service community. A rental community can be a CCRC or a stand-alone community with a single offering.

 

WHAT ARE ENTRANCE FEES?

An entrance fee is a one-time, upfront fee you pay to move into the independent living part of a senior living community. The amount of the entrance fee varies, depending on the size of the residence you choose, whether it will be just you or you and another person living in that residence, and the contract option you select. At a CCRC community requiring an entrance fee, you can expect multiple contract options offering varying levels of refundability to you or your estate. For example, at Harrogate, there are several contract options to select from that will guarantee you a refund.

Life Care entrance fee tax deduction:
The IRS recognizes that a Life Care contract is one where you’re prepaying medical expenses, meaning a good portion of your monthly fees are tax-deductible. And that’s true whether you receive health care services or not. Generally, regardless of which type of contract you choose, deductions are available. Because tax deductions change frequently, it’s best to talk with your tax professional for all the details.

WHAT ARE MONTHLY SERVICE FEES?
Monthly service fees are just what the name suggests: a fee you pay every month that covers the services and amenities package associated with living at the community. The amount you pay depends on the size of your residence, how many people live there, and the range of services and amenities available to you in your level of living: independent living, assisted living, memory care or skilled nursing.

Interestingly, according to this recent article from TheStreet.com, housing, not health care, was the number one expenditure for retirees over 65. Housing costs include mortgage (if you have one), property taxes, insurance, utility bills, maintenance and homeowner’s association fees – but at a senior living community, these are the types of expenses your monthly service fee pays for, along with so much more.

That “so much more” includes services such as:

  • All maintenance, both inside and outside your home
  • Regular housekeeping, which often includes flat linen service (at Harrogate, we provide this service weekly)
  • Utilities – usually all except for internet and telephone
  • Scheduled transportation to events, shopping, medical appointments
  • On-site 24/7 security
  • Emergency response system

As well as amenities, including:

  • A dining plan with a variety of dining choices and chef-prepared meals
  • Access to the community’s fitness offerings (Harrogate, for instance, has an indoor heated pool and fitness center with full-time instructor)
  • Use of all common spaces (at Harrogate, those include an auditorium with regularly scheduled performances, bocce ball courts, outdoor gazebos, walking trails, card rooms, woodworking shop, garden and dog park).
  • A full monthly calendar of outings, activities, events, etc.

The list of services and amenities goes on, but you only pay one bill each month.

HOW DOES THE ENTRANCE FEE REFUNDABILITY WORK?

At a CCRC, you don’t actually own your residence; however, most CCRC agreements stipulate that refunds will not be paid until your residence is “resold and reoccupied.” As with any big financial decision, read the contract thoroughly, and ask lots of questions to understand exactly what you’ll be getting back, and when.

 

COMMONLY ASKED QUESTIONS

Kevin Fletcher has answered countless questions during his tenure as Harrogate’s director of sales and marketing. Here are a few he hears most often, along with his answers:

Q: As a prospective resident, what should I look for when I visit a CCRC?
A: Look beyond what independent living offers you, and request a tour of the CCRC’s levels of care. Also, ask about the management and financial stability. Check out the activity calendars. When you can, stop to talk with actual residents. Be sure to ask about a community’s entrance fee options to get a clear picture of which one would best fit your needs and wants.

Q: Is now the right time to move into a community?
A: “All signs point to YES!” Ok, there’s no magic eight ball that tells you when it’s time to move. But many CCRC residents say they wish they’d moved five years sooner. That’s because they didn’t realize until they moved in that their quality of life would improve because of all the benefits their community offered — the remarkable dining, wellness opportunities, friendships, packed calendar of activities, amenities, resident-driven clubs, and on and on. Something else to consider: If you wait until you need health care, you may not qualify for a Life Care contract in independent living.

Q: How do I know which type CCRC is right for me?
A: That depends on your priorities. Do you prefer to pay a bit more so you’ve got a plan no matter what the future may bring? Then a Type A CCRC might be the best fit. Or maybe you’re comfortable with paying less upfront to accept more risk in the future. In that case, a Type C CCRC may be better.

Q: What are the differences between Fee For Service (FFS) and Life Care contracts?
A: Some CCRCs offer both FFS and Life Care contracts, while others may offer both Type A and Type B contracts. FFS entrance fees and monthly service fees tend to be lower because you are paying for fewer benefits, like advantageous health care rates. A CCRC that offers a Life Care contract helps protect your assets by controlling the cost of higher levels of care, if/when you need them. This allows you to better predict potential health care expenses. Life Care contracts are even more financially advantageous to couples. For the same basic monthly service fee, if one spouse needs nursing care, they can receive it for as long as needed in the community’s on-site health center while the other spouse stays in the apartment home. In a similar scenario at an FFS community, a couple will pay both the monthly service fee on their apartment home and the market rate for higher levels of care. This unplanned spike in monthly costs could empty a nest egg rapidly and unexpectedly. Plus, with a Life Care contract, you have an opportunity to take a tax deduction, which is something FFS contracts don’t offer.

OTHER QUESTIONS? WE’RE HERE TO HELP.

Got more questions about CCRC contracts? We’re ready to answer them! We work with seniors and their families every day, helping them find the right fit for their lifestyle and finances. Call one of our Life Care Consultants at (732) 942-5272, or send us your question using the Contact Us form, and we’ll help you navigate your senior living search.

Understanding your senior living options.

Kevin Fletcher, Director of Sales and Marketing at Harrogate, can explain all the pros and cons of your senior living options in the Toms River, Lakewood and Ocean County area. His team of Life Care Consultants have helped hundreds of seniors just like you find the best option to fit their lifestyle and budget.

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Skilled Nursing Care: What Is It?

What Is Skilled Nursing Care, Assisted Living and a Nursing Home?

People typically use the words “skilled nursing, “assisted living” and “nursing home” interchangeably, but they’re actually all different terms.

Nursing home is a term used to describe the physical building where residents receive assisted living or skilled nursing care.

Assisted living is for seniors who don’t need around-the-clock nursing care but who could use help with activities of daily living (ADL). ADLs include assistance with eating, medication reminders, bathing, dressing and getting out of bed.

Skilled nursing care refers to a patient’s need for care or treatment that can only be performed by licensed nurses. This type of care is usually offered in hospitals, assisted living communities, Life Plan Communities, nursing homes and other certified locations. Skilled nursing is mostly regulated by the U.S. Department of Health and Centers for Medicare & Medicaid Services (CMS). To be certified by CMS, skilled nursing communities must meet strict criteria and are subject to periodic inspections to ensure quality standards are being met.

Types of skilled nursing care

If you or a loved one has had a stroke, surgery or extensive treatment for kidney, heart or respiratory conditions, they may still require rehabilitation at a skilled nursing community following their release from the hospital. Medicare will pay for skilled nursing services if a physician prescribes specialized therapies – physical and occupational therapy – medications, medical equipment and supplies, and social services, to help your loved one meet their health goals. However, to qualify, you must go to a Medicare-certified skilled nursing community.

Physical therapy: After an illness, surgery or hospitalization, a rehab care team will create a personalized plan for the most optimal outcome.

Occupational therapy: Help adapting to social and physical environments through specialized therapies for getting dressed, memory training and coordination exercises.

Speech therapy: Addresses communication issues and swallowing dysfunction. Speech and language pathologists design a treatment plan to help with language ability, provide alternate communication strategies and give appropriate diet recommendations.

Skilled nursing communities can offer a wide range of services and medical care: physical therapy, occupational therapy, speech-language pathology, wound care, intravenous (IV) therapy, injections and monitoring of vital signs and medical equipment.

Skilled nursing staff includes:

  • Registered nurses
  • Licensed practical nurses
  • Speech/Language pathologists
  • Licensed vocational nurses
  • Audiologists
  • Medical directors

They also must have a transfer agreement with a hospital in case a resident requires emergency care.

Helpful tips and question to ask

As you evaluate all the possible care options, here are some helpful tips to get you started and important questions to ask before you decide.

Getting started:

  • Reach out to people you trust to be unbiased – consultants, friends, family or a physicians – for their candid advice and recommendations.
  • Once you have a list of care options, the state of New Jersey Report Card for Health Facilities has been replaced by the CMS-Five Star Quality Rating System. To compare your options, visit Nursing Home Compare webpage at Medicare.gov
  • You can also check a community’s online reviews, but because personal reviews can be very objective, it’s important to weigh them with other information you’ve already collected.
  • Once you’ve narrow down your list, start scheduling visits to your top communities. As you’re doing this, consider other important details, such as how they answer the phone, the time it takes for them to return messages and their helpfulness.

Even if you know the differences among the types of care available, it can be hard to know which skilled nursing community is best for you or your loved one. To help seniors, their families and caregivers compare different skilled nursing communities more easily, CMS created a Five-Star Quality Rating System that gives each community a rating between 1 and 5 Stars. A 5-Star rating signifies “much above average quality” care. A 1-Star rating represents “much below average quality.”

Throughout Harrogate’s 30-year history, we’ve consistently achieved a 5-Star CMS rating.

Taking a tour? Note the following:

  1. What are your impressions of the place?
  2. Does it look and smell clean?
  3. Does the staff smile and greet residents by name?
  4. Do the residents seem well cared for and happy?
  5. Could you imagine your loved one living here?

Some important questions to ask:

  1. Is there an entrance fee? If so, how much is it?
  2. What’s the monthly fee?
  3. What’s covered by the monthly fee? What’s not covered? (i.e., phone, cable TV, housekeeping, meals, health care)
  4. How much input do residents, family members and your family doctor have regarding your loved one’s care?
  5. Is there a calendar of resident activities?
  6. What’s their schedule for a typical day?
  7. Try the food. How is it?
  8. What’s the dining arrangement? Do residents eat in a dining room or in their rooms? Is it cafeteria-style or sit-down?
  9. What’s the visitation policy? Are there set hours, or are visiting hours open?
  10. What security safeguards are in place?
  11. How much notice is given before discharge?
  12. What happens if a resident runs out of money?
  13. What’s the staff-to-resident-ratio?
  14. What forms of insurance does the community accept?

If you’re unsure which type of skilled nursing care is best for you or your loved one, contact your doctor or physician to assess what services you’ll need now or in the future. Harrogate offers on-site independent living, rehabilitation and skilled nursing. If you’d like to learn more about Harrogate or discuss your care options, use our contact form or call (732) 942-5272.

Deciding Where to Retire

An elderly couple walking across the city arms crossed

One of the most crucial retirement decisions is deciding where to retire, because not only will your retirement location have a big impact on you, it can have a big impact on your family and friends. There’s certainly no shortage of retirement options in New Jersey, but the temptation of a warmer climate like Florida is always there. Each individual or family ultimately makes these choices, but there are plenty of great reasons to retire right here in the Garden State and remain close to home.

Family is a big reason many seniors choose to stay in the Lakewood and Toms River area. On one hand, living at a community with Life Care, like Harrogate, offers the peace of mind of knowing everything – including skilled nursing, rehab and higher levels of care – is close by. On the other hand, putting a smart plan for your future health care in place also lets you focus on enjoying time with your family and grandchildren. Many seniors wouldn’t trade being around their loved ones for any tropical climate in the world.

Of course, family isn’t the only reason local seniors choose to remain close to home. There simply aren’t many parts of the country with as many intellectual and cultural attractions so close by. Ocean County offers a long list of fun and interesting activities. And Washington, D.C., New York City and Philadelphia alone offer more activities than most people could fit into a lifetime.

Due to the misconception that New Jersey has higher taxes than most states, it can often be overlooked as a retirement option.While local taxes are a legitimate point of discussion, seniors who’ve chosen to retire in a Life Care Community like Harrogate are usually surprised by the number of available tax breaks. A simple visit with your financial advisor or the finance department at most senior living communities will point you in the right direction.

Seniors who choose to retire close to family and friends are typically very happy with their decision. No matter what you decide to do, make sure you do your research, look at your priorities, have a heart-to-heart conversation with family, and choose the option that feels right and makes the most financial sense. Everyone has a unique idea of what retirement looks like, and New Jersey offers countless options to choose from.

To help you make a more informed decision, stop by Harrogate and pick up our helpful guide. We can help you get a better understanding of all your retirement options. You can also schedule a personal appointment by using our contact form.

Making Important Decisions Regarding Long-term Care

The conversation about what your family should do if you ever find yourself in a situation where you can no longer care for yourself can be a difficult one. However, sitting down and actually having that conversation can make a challenging situation a little easier for those you love. Of course, there’s always a chance you won’t end up needing long-term care. But making these important preparations and decisions about your health can help preserve a higher quality of life should something happen and you require long-term care.

How to Plan for Long-term Care Costs

Some people are more likely to need long-term care than others. For instance, those with a family history of diseases, especially degenerative brain disorders such as Alzheimer’s, have a higher risk of developing the disease and, therefore, have a higher chance of needing an assisted living situation. When assessing your need for long-term care, ask yourself:

  • What are your lifestyle choices like? Do your actions contribute to or hinder your overall health? Try to live a healthy lifestyle that reduces your risk of illness and injury. Eat well, exercise regularly, stay mentally active and avoid falls.
  • Do you anticipate any issues with hereditary illnesses or conditions that could make it difficult for you to age in place?
  • How close are you to retirement? Would your retirement budget be able to cover the costs of long-term care? If you think you’re at risk for needing long-term care and you aren’t financially prepared, it may be a good time to invest in long-term care insurance.
Paying for Long-term Careskilled nurse caring for senior resident

Americans spend billions of dollars every year on long-term care for seniors and the terminally ill. These services may cost more than your average Lakewood, New Jersey, citizen can afford. If you end up needing assisted living, you may have to pay for it through various sources:

  • Personal funds such as pensions, savings and income from stocks
  • Medicare, Medicaid or your private insurance provider
  • Veterans benefits
  • Services through the Older Americans Act
  • Long-term care savings programs or insurance
Types of Long-term Care

There are generally three kinds of long-term care:

  • Skilled care designed to treat a medical condition all day, every day. A treatment plan is ordered by a doctor and then performed by skilled medical personnel, such as a registered nurse.
  • Intermediate care involves intermittent nursing and rehabilitative care.
  • Custodial care aims to assist with one’s activities of daily living, such as bathing, eating and dressing.

Not everyone needs intensive 24-hour care. There are also home health care options for those who need some supervision but not round-the-clock monitoring. This can be helpful for seniors who want to age in place but have mobility issues when it comes to making it to the doctor on a regular basis for things like respiratory therapy, checking blood sugar, cleaning and bandaging wounds, monitoring vitals, and who may need assistance with bathing or dressing.

If you live with a partner or family member, there’s also the option of adult day care. Adult day care is a place for seniors who need supervision

and medical attention during the day and working hours. These centers allow people to continue with their jobs to pay for medical care without having to worry about their loved one’s well-being while at work.

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Talking about long-term care with those you love isn’t easy, but it’s very important. Determine your potential for needing long-term care, and make lifestyle changes that foster health and independence. Start saving now for long-term care costs, or invest in insurance that will protect you if needed. Finally, know your options when it comes to long-term care.

Author

June Duncan is the co-creator of Rise Up for Caregivers, which offers support for family members and friends who’ve taken on the responsibility of caring for their loved ones. She’s the author of the upcoming book, The Complete Guide to Caregiving: A Daily Companion for New Senior Caregivers.

10 Useful Downsizing Tips for Seniors

Harrogate has worked with Dina Blackwood of Finding Spaces for years to help Ocean County seniors just like you enjoy a less stressful move. Dina offers her 10 useful downsizing tips to help make your move as easy as possible.

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