Comparing Contracts and Rates
Comparing retirement community pricing can be tricky. Lower monthly fees do not always indicate the best buy for your money; especially if lower fees are a part of a ‘Fee-For-Service’ contract.
There are two popular contracts available at most retirement communities:
- 1. A ‘LifeCare’ or ‘All Inclusive,’ A-type contract that includes services such as housekeeping, utilities, meals, maintenance and health care, bundled into a monthly fee,
and
- 2. A ‘Fee-For-Service,’ C-type contract presents a base monthly cost then adds on extra charges for meals, maintenance, housekeeping, utilities and health care; often boosting your monthly fees far above the LifeCare monthly rates that initially appeared more expensive.
Foulkeways at Gwynedd offers a 'LifeCare' contract.
Keep in mind that health care costs make up a large component of the entry fees and monthly fees in most ‘LifeCare’ contracts. With health care costs rising at an alarming rate, Fee-For-Service contracts may truly be more about your tolerance for risk than initial cost savings. And at Foulkeways, all residents are entitled to a sizeable tax deduction on the portion of their entry fee and monthly fees deemed “prepaid medical expenses” by the IRS.
Future increases in monthly fees are a concern to all, and although no one can predict the future, Non-Profit communities are not obligated to pay shareholders or board members. They are typically affiliated with religious organizations and consistently offer more innovative services, conservative leadership and greater financial stability. For-Profit communities are under constant pressure to generate profits for their stockholders. They may be bought or sold and ownership may change, again proving a test of your tolerance for risk.
Remember, never take a monthly fee at face value. Ask the Marketing Department or Admissions Department representative whether the community is a non-profit or for-profit organization. Be sure they define which type of contract the posted fees represent (A or C), and find out all that is included or excluded; you’ll be glad you did!
