Life Care Contracts Explained

Posted on June 30, 2021

When you move into a Life Care Community like The Highlands at Wyomissing, you enter into a Life Care contract. What does that mean, exactly? What sort of services are included in this type of contract and what isn’t? Are there different types of contracts? If you’ve never researched these types of options, you might be more than a little confused, says Kevin DeAcosta, President and CEO of The Highlands at Wyomissing, the only nonprofit Life Care Community in Berks County, PA.

“Contracts can be confusing, but we try to make things as easy to understand as possible when you join our community,” he explains. “The Highlands at Wyomissing offers two types of Life Care contracts: a comprehensive Type A contract and a modified Type B contract. We encourage future residents to thoughtfully consider the benefits of each type to determine what contract is best for them and their future.”

Life Care contracts work like so: upon entry to the community, residents pay a one-time entrance fee and then fixed monthly rent from then on out. Residents are then entitled to care no matter where they live in the facility. How much care and the terms under which the care is administered can vary depending on what contract type is chosen.

All Life Care contracts cover long-term care, which includes assistance with the tasks of daily living, such as mobility assistance, dressing and grooming assistance, medication management, bathing and toileting, meal preparation and eating assistance as well as a certain level of aid for those with Alzheimer’s disease or another form of dementia. Life Care contracts do not cover healthcare services, though. Things like diagnostic testing, therapies, prescriptions, medical equipment, doctor visits, x-rays and the like would be covered under an insurance plan like Medicare or private long-term care insurance. However, most, if not all, Life Care Communities have the ability to work with insurance companies in order to make sure residents receive the highest quality care possible.

“It’s estimated that 70 percent of seniors over the age of 65 will need some form of long-term care as they get older,” Kevin says. “Moving to a Life Care Community is, in a sense, a form of insurance against this future need. Our Life Care contracts provide peace of mind for our residents and their family members so that they can enjoy this time of life without worry.”

Types of Life Care Contracts

There are three major types of Life Care contracts available in the senior living industry: Type A Life Care, Type B Modified Life Care, and Type C Fee-for-Service contracts. Whatever contract is chosen, residents are entitled to a wide variety of services and amenities such as maintenance-free living, fitness classes, events and activities, scheduled outings, meals and more. Contracts also allow residents to be moved to an appropriate level of care if and when it’s necessary, including assisted living or personal care skilled nursing, rehabilitation and memory support.

Type A Life Care Contract

Type A contracts are the most expensive type of Life Care contract, but they’re also the most comprehensive and all-inclusive. Sometimes referred to as an “exclusive” or “extensive” contract, this option requires a resident to pay a significant up-front entrance fee that guarantees an unlimited amount of services without having to pay additional fees (except for the monthly fee that’s required throughout your tenure). This type of contract can be very beneficial for helping protect seniors against the rising cost of healthcare, as well as protecting their estate and assets from medical costs.

At The Highlands at Wyomissing, our Type A contracts offer housing, services, amenities and, most importantly, unlimited healthcare at the same monthly service fee. It provides priority access to Personal Care services, Skilled Nursing, Home Care services, Memory Support, Short-Term Rehabilitation as well as services from our on-site physicians.

Type B Modified Life Care Contract

A Type B contract is very similar to Type A contract and includes the same basic services. However, this type of contract differs in the amount of services covered by the entrance and monthly fees. Some Type B contracts, for example, put a limit on personal care and skilled nursing care or may require the resident to pay additional costs to use those services longer than the contract covers. The entrance fee for Type B contracts is usually lower than Type A, and they can be a good choice for residents who can’t or don’t want to pay the higher entrance fee.

Type B contracts at The Highlands at Wyomissing offer housing, services, amenities and limited healthcare. Single occupants receive 60 Personal Care and 60 Skilled Nursing days in a lifetime. Double occupants receive shared 90 Personal Care and 90 Skilled Nursing days in a lifetime. The contract provides priority access to Personal Care services, Skilled Nursing, Home Care services, Memory Support, Short-Term Rehabilitation as well as services from our on-site physicians.

Type C Fee-for-Service Contract

A Type C or Fee-for-Service contract generally has the lowest cost for entry of all Life Care contracts. What you receive in this type of contract varies greatly and may not include discounts and priority access to additional services. The Highlands at Wyomissing does not offer a Type C contract.

Understanding Entrance Fees

Entrance fees are one-time, up-front fees that you pay upon becoming a resident of a Life Care Community. Although these fees can be significant, a portion of the fee is generally refundable to you or your estate. Entrance fees at The Highlands at Wyomissing amortize over the first 50 months of occupancy at a rate of 2% per month, and any unamortized portion is refunded to the resident or the resident’s estate if the contract is terminated before the first 50 months of occupancy.

“As you’re considering communities, be sure to consider the different types of Life Care contracts available and use those to thoughtfully compare your future options,” says Kevin. “The right answer for you will depend on your financial situation, your estimated future needs as well as your risk tolerance. We invite anyone interested in our Life Care Community to contact us to learn more about the benefits of both types of contracts available at The Highlands at Wyomissing.”

Your Remarkable Future Awaits.

The Highlands at Wyomissing opened its doors in April of 1989 with apartments for those who needed a helping hand with daily activities. Since then, we have grown into a large community of homes and apartments, amenities and services, and so much more.

With over 113 acres of gently rolling hills, lush walkways and towering trees, The Highlands at Wyomissing has offered stunning amenities, engaging activities and endless opportunities for more than 30 years. Located just outside of Reading, Pennsylvania, we’re proud to be the only nonprofit Life Care Community in Berks County, where residents are free to live their active, independent lifestyles with a continuum of care available right at home if they ever need it.

When you choose The Highlands at Wyomissing, you’re free to create a retirement that mirrors what you’ve always wanted for your future. What are you waiting for? Get a taste of what life is like on our vibrant campus at The Highlands at Wyomissing by contacting us at 610.775.2300 for more information.