Understanding Retirement Community Contract Types

October 31, 2019

You’ve reached that stage in your life when you want the security that a retirement community offers. Your reasons may vary: from the desire for a maintenance-free lifestyle to one that takes into consideration the need for future healthcare.

But whatever your reasons for making the move, it’s important to understand the various contract types that retirement communities offer.

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Type A — Life Care Contract 

This contract level carries a single entry fee and a predictable monthly fee that includes residential services, assisted living, memory care and skilled nursing. If and when there is a move from independent living to assisted living or skilled nursing, the monthly service fee remains the same other than the costs of additional meals and any special supplies needed for the additional care. Type A contracts are ideal for those people who want the peace of mind that comes with a single, set monthly fee, thereby ensuring that all their health care needs will be covered for their lifetime. 

Type B — Modified Contract 

Type B contracts provide similar services as a Type A contract such as living accommodations, dining options, access to campus amenities, transportation, and medical services. The biggest difference between the two contracts lies that while assisted living, memory care and skilled nursing may be available, they all may not be fully covered by the monthly fee. Oftentimes, the resident will have access to a pre-defined number of days in the healthcare center at no cost and/or healthcare services may be offered at a discounted rate.  

Type B contracts are ideal for people who don’t expect their health care needs to increase significantly over time or whose needs can be met by a facility that offers Assisted Living and Memory Care, plus an ECC licensure. Most Type B contracts still offer a discounted rate (relative to market rates) for extra services such as skilled nursing or they may grant residents priority access to the same with preferred rates.  However, the resident absorbs more of the financial risk of higher monthly service fees than with Type A contracts.

Type C — Fee for Service Contract  

A Type C contract is based upon a fee-for-service model, which means very little, if any, medical care is covered. Although many Type C contracts will cover emergency care, and some may even cover short-term care, none cover long-term care or skilled nursing. These contracts appeal to those people who are willing and financially able to assume the full risk of their future health care costs as the resident’s monthly fee will increase to reflect the market rate for care. Type C contracts may save on upfront costs, but medical costs can quickly eat up the amount saved. These contracts are good only for those people willing and financially able to assume the full risk of their future health care costs.

Type D — Rental Contract 

Rental contracts require no entry fee, though they may come with a nominal “community fee.” Contracts are normally month-to-month and service fees may be higher than a comparable entry fee in a Life Plan community (CCRC). Residents under this contract may have priority access to an affiliated, off-site healthcare facility but are not necessarily guaranteed access. 

Type E — Equity/Co-Op Contract 

An equity contract involves the actual purchase of real estate or ownership in a co-op as opposed to paying an entry-fee. Monthly service fees may still apply.  Healthcare is generally available through a fee-for-service basis at full market rates.

Moorings Park

In general, Life Plan communities offer residents a variety of residential and healthcare option with an eye toward their individual goals and needs. At Moorings Park, you’ll fine both Type A and Type B contracts. Compassionate healthcare delivered daily is coupled with state-of-the-art amenities and luxurious residences. Those considering a move to a Life Plan community should take the time to schedule a visit and review the specifics of the various contract types to help you determine what option is best for you and your family. 

For more information on Moorings Park and its three communities, visit or call 239-643-9111.

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