Clare Oaks Blog
Posted: Wednesday, October 18, 2017
By: Clare Connection
Continuing Care Retirement Communities: Modified Fee-for-Service Contracts Explained
A Continuing Care Retirement Community (CCRC, or “Life Plan Community”) can be a wonderful solution for older adults who are independent and active today, but who seek the peace of mind that comes with living in a community where assisted living or health care services will be provided when needed. A CCRC is the only type of retirement community that contractually provides access to services spanning the full continuum of care—beginning with independent living and progressing to assisted living and around-the-clock skilled nursing care.
Yet, CCRCs are not all created equal and resident payment plans can vary dramatically from one provider to another. No single contract type is right for everyone so it is important to understand the differences and make an educated decision regarding your unique situation.
Key features of modified fee-for-service contracts
Modified contracts are essentially a form of partial insurance against the future cost of healthcare. Therefore; all other things being equal (i.e. appeal of the location, size of the unit, amenities, etc.) the monthly fee at a retirement community that offers a modified contract will be higher than a true fee-for-service contract and lower than a lifecare contract. The same may also be true of the entry fee. Under a modified contract a resident will receive a discounted rate for healthcare services; often taking the form of a certain number of days in the healthcare center at no additional cost or a percentage discount off the market rate. The amount of the discount can vary from one provider to another.
Residents who choose a modified Fee-for-Service contract are exposed to unlimited risk in terms of the total out-of-pocket costs for care services, albeit at a discounted rate.
Is a modified contract right for you?
If you prefer to pay a reduced amount for healthcare services in the future but do not want to
pre-pay for all of your care then a modified fee-for-service contract could be the appropriate choice. If you own long-term care insurance it will also help mitigate the risk of exposure to out of pocket costs for care.
The above article was written by Brad Breeding of myLifeSite and is legally licensed for use.