Continuing Care Retirement Communities

The contract that individuals sign when entering a CCRC determines the amount that their stay will cost and the type of amenities and health care services that will be provided. There are three main types of contracts: extended, modified, and fee-for-service.

About four out of ten CCRCs use an extended contract (AAHSA, 1999), in which individuals agree to pay an entry fee up front and a monthly fee for the rest of their life. Monthly fees usually only increase due to inflation or increased operating costs. This type of contract covers almost all of the health care needs of residents throughout their stay.

Three out of ten CCRCs provide a modified contract, which generally has a lower entry and monthly fees than an extended contract. However, there is a set limit on the number of days of health care per year that an individual can receive, and each resident is responsible for all costs beyond that limit. Like an extended contract, the costs of this agreement can only go up based on inflation and increased operating costs.

A fee-for-service contract is used by about three out of ten CCRCs. Individuals utilizing this option typically come from outside the organization to access the nursing home facility and are willing to pay as they receive care. Costs for this type of care can increase with inflation, operating costs, and with the amount of long-term care usage.