Daytona Beach Senior AdvisorWhat are the main types of continuing care contract?
Life care contracts (sometimes called Type A) include future assisted living and nursing care with little or no increase in the monthly fee; modified contracts (Type B) include a set amount of care or a discount; fee-for-service contracts (Type C) give access to care at market rates.
Providers may offer several types, and names vary. Read what the contract actually promises rather than relying on the label.
How do entrance fees relate to contract type?
Life care contracts usually carry the highest entrance fees because the community takes on more care-cost risk, fee-for-service the lowest; within each type, a higher refund percentage usually means a higher entrance fee.
A 90 percent refundable plan costs more up front than a declining-refund plan, but returns more to the estate. Decide which matters more to your family before comparing prices.
How do monthly fees change over time?
Monthly fees typically rise each year with operating costs, and the contract must explain how increases are set; residents are entitled to notice and to explanations at the provider's meetings with residents.
Ask for the history of monthly fee increases over at least five years. A pattern of large jumps is worth understanding.
Are entrance fees tax deductible?
Part of an entrance fee or monthly fee attributable to medical care may be deductible as a medical expense under federal tax rules, and providers often supply an estimate of that share each year.
Ask the provider for its prepaid medical expense estimate and confirm treatment with a tax adviser.
What should we ask John Knox Village or DeLand Senior Care about contracts?
Ask which contract types and refund plans are offered, the entrance fee and monthly fee for each, what care is included and where it is delivered, the fee increase history, and the waiting list for apartments and for care beds.
Then compare the answers with OIR's filings and with the AHCA records for any assisted living or nursing units tied to the provider.
Can a resident switch contract types later?
Sometimes, but rarely on favorable terms: most providers set the contract type at entry, and changing later usually means paying a difference in entrance fee or accepting new health screening.
Choose the type that fits the care you expect to need in ten years, not just today, and ask the provider in writing whether any conversion option exists.
At a glance
| A life care (Type A) contract | A fee-for-service (Type C) contract | |
|---|---|---|
| Entrance fee | Usually highest | Usually lowest |
| Future care cost | Largely included | Paid at market rates when used |
| Risk | Community bears more care-cost risk | Resident bears more care-cost risk |
Sources: Chapters 408, 429 and 651, Florida Statutes; Florida Administrative Code chapters 59A-36 and 65A-2; publications of AHCA, DCF, OIR and the Department of Elder Affairs; and the CareScout and VA tables named on the page. See our editorial standards for how figures are checked.
