What is Life Care?
After a lifetime’s worth of hard work, making contributions to your family and your community and preparing for your future, you should be able to relax and enjoy your retirement with the peace of mind that you have a secure plan for your health and finances in place. A Life Care plan ensures that kind of peace of mind for you and your family.
A Life Care plan is a type of contract option, also known as a Type A contract, which you can enter into upon moving to a senior living community that offers it. In this type of contract, you pay an entrance fee, typically higher than you would with a Type B or Type C contract option. But that higher entrance fee guarantees you priority access to on-site medical care if and when you ever need it. A Life Care contract also pre-pays for care, so you don’t ever have to worry about medical bills. You also pay monthly service fees to live in the community. In addition, you or your estate will receive a portion of your entrance fee back when you leave the community. The exact percentage of a refund on entrance fees varies from one community to another, so ask the sales counselor you’re working with about it.
Life Care Communities
A Life Care community offers the full continuum of care, which usually includes assisted living, memory care, skilled nursing home care and rehabilitation. Life Care communities, also known as Continuing Care Retirement Communities (or CCRCs), also have independent living apartments, and offer many services and amenities meant to make life as fulfilling, engaging, and maintenance-free as possible. When you live in a Life Care community, you’re not only securing a future of financial and medical safety, you’re also choosing a well-rounded lifestyle in a community designed to suit your needs and promote your long-term wellness.
The Benefits of Life Care
• Since your health care is prepaid, you’re protected from many of the rising costs of medical care.
• The monthly fees you pay are predictable, so you’re unlikely to face unexpected financial challenges.
• Since priority access to care is guaranteed, you can rest assured on-site medical care is available to you at a moment’s notice.
• If your health needs change, and you have to move to a different level of care, your finances will remain predictable and manageable.
• A portion of your entrance fee is refunded to you or your estate when you leave the community.
At a senior living community, you’ll have everything you need to live a long and happy life, from social engagements to learning opportunities to a culture promoting holistic wellness. At most nonprofit communities, if you happen to outlive your resources through no fault of your own, you’ll have a home for life, plus access to top-of-the-line health care, if you ever need it.
Potential Tax Benefits
Several IRS rulings have determined that the entrance fee paid to move into a senior living community with a continuum-of-care contract is considered a prepaid medical cost, and therefore is tax-deductible. Consult with your financial or tax adviser to see if you qualify for this.
Other Types of Contract Options
Seniors who live at communities offering Type A, Type B and Type C contracts can all enjoy the same services and amenities the community has to offer, but may pay higher or lower fees and have different levels of access to long-term care, depending on their contract type. In addition to the Type A Life Care contract, there are two other contract types available.
• In a Type B contract, also called a “modified plan” contract, there may be a lower entrance fee and monthly service fee than with a Type A contract. You pay an additional cost if a higher level of care, like assisted living or memory care, is required. Health care services are typically provided one of two ways: 1) a limited number of free days included as part of the entrance fee, with additional care billed at per diem rates, or 2) an ongoing, minimally discounted rate. Health care services may be provided on- or off-site, and two monthly fees may be incurred if couples require different levels of care.
• In a Type C contract, also called a “fee-for-service contract,” you pay the lowest entrance fee and monthly service fee, but you pay the market rate for medical care if and when you ever need it.
With Life Care, you know you’ll have a home for the rest of your life where you’ll receive excellent care if and when you need it. You’ll know where you’ll receive that care, who will provide it, and exactly how much it will cost. And you’ll know that your estate will be preserved. It’s the ideal situation for a senior seeking a lifestyle with a plan in place that instills confidence in the whole family. If you’d like to know more about Life Care at The Buckingham, contact us here to speak to a trusted adviser.