Know Thy "Care Contracts"

Jane Adler's always informative 55 Plus column had a nice overview of the various types of contracts out there that are being signed by seniors moving into "continuing care" communities. I'll say this, I'm no expert on these arrangements, however, we probably get one call a month about this general topic and it's important to have a basic working knowledge of these set-ups.

The piece details three typical contractual set-ups:

90/10 - Pay an upfront fee that's 90% refundable when you leave. Continuing-care projects usually offer some kind of refund, with 90 percent of the entry fee fairly standard. The refund is made when the unit is resold. Generally, the bigger the refund, the smaller the health-care benefit. For example, Friendship Village in Schaumburg has several contracts. In one building, the entry fee for a one-bedroom apartment ranges from about $162,000 to $197,000 for a 90/10 contract. Under this arrangement, 90 percent of the entry fee is refundable and the 10 percent is the discount on assisted-living and nursing care. All residents at Friendship Village receive 90 days of free health care.
*Personally, I see this set-up most often*

50/50 - Under a 50/50 contract, the entry fee is higher, ranging from $181,000 to $216,000. This contract refunds 50 percent of the entry fee and provides a 50 percent discount on assisted-living and nursing care.

50/0 - A 50/0 contract has the lowest entry fees, ranging from $95,000 to $130,000. Half the entry fee is refundable, and there's no discount on health care.