What is a Life Plan Community?

Seniors playing cards.

The aging process can be a rough and bumpy one. Your loved one may transfer from facility to facility over the years, each big life change becoming increasingly more difficult for them. On average, seniors will live in an independent living facility for 10 to 12 years, an assisted living facility for 1 to 2 years, and then a skilled nursing facility for 1 to 2 years. Why not have all these facilities in one place? That is where life plan communities come in. In a life plan community, residents are said to “age in place.” This is because life plan facilities include a variety of services that cater to all possible health and aging needs, allowing for a continuum of care. And all of this is available on one big residential campus. This alleviates the pressure for your loved one to constantly move as his or her needs change. 

Typically, seniors move to a life plan community while still living independently, with only a few health concerns. The needs of residents are consistently monitored and cared for. As their medical needs change, the level of care is increased proportionally. The residents will “age in place” until they have reached the end of life, surrounded by all the best medical care for their needs. 

Not only is such an environment beneficial for the consistent and accurate care of your loved one’s health needs, but it is also advantageous for their social needs. Seniors often find themselves socially isolated as they age. However, being around similarly aged peers will help them fight depression and loneliness. Being part of a social environment will help them to live longer. A life plan community with its vast social network is perfect for the active adult. Baby boomers, which account for 28% of our population, fit perfectly into this retirement living option. There is often quite a range of social activities and amenities available in life plan communities, which will keep your loved one busy and happy. 

What is Life Plan Community?

So what exactly is a life plan community? We will break it down for you. Since the term “life plan community” is relatively new, you may have never heard it before. It was in fact, at one time called “continuing care retirement communities,” or CCRCs. The two terms are often used synonymously. In 2014, a national task force was established to discuss the name and evaluate the effectiveness of the CCRC title. The task force agreed upon the term “life plan” instead. They wanted the new name to make these new communities more welcoming to adults who do not need nursing care. The new name encourages residents to feel welcomed and comfortable, no matter what stage of the aging process they are in, and what services they need. With the name change, life plan communities have been able to emphasize the active lifestyle residents can have, rather than the previous care-focused mentality. 

In this article, we will touch on all the important aspects of what you should know to expect from a life plan community. Here are the three things that you will experience from a life plan community:

  • An active lifestyle that promotes personal growth, new skill development, and access to entertainment
  • Various levels of care on campus to suit residents’ changing needs
  • A lifestyle plan and contract options for the stages of older adults lives

Active Lifestyle and Structure

With about 2,000 life plan communities in the US today, many communities have included extensive libraries, fitness centers, and dining venues with elegant dining rooms. There are beauty and barbershops, as well as entertainment. Activities may include music events, dancing, games, art, dance, history, lectures, and movies. Life plan communities often have an upscale nature to them, usually with picturesque surroundings, and boasting beautiful living spaces that have an elegance that most senior communities do not. 

The various levels of care provided can be housed in a single high-rise building or a group of buildings like garden apartments, cottages, duplexes, mid- and low-rise buildings, or on a campus setting. The size of senior housing buildings varies from one to another, but the average is over 330 units. Broken down, this would be about 231 independent living units, 34 assisted living beds, and 70 skilled nursing home beds. 

Levels of Care

So by now, you’ve probably ascertained some of the varying types of care available at a life plan senior living community. They include independent living, assisted living, skilled nursing, and memory care. We will go over each of them: 

Independent Residential Living: This is the lowest level of care provided at a life plan community. Residents live in apartments and cottages in a community of like-aged individuals with a similar level of health. Maintenance and grounds care are taken care of by the staff, and seniors can enjoy social and wellness activities. There are a variety of on-campus amenities available, such as fitness centers, salons, dining, physical services, therapy service, and transportation services. 

Assisted Living & Personal Care: The community may offer either assisted living or personal care. Personal care is care in which residents are assisted in performing activities of daily living (ADLs). This could include medication management, incontinence care, grooming, housekeeping, or memory support. The amount of support, and thus the cost depends on how much assistance is needed. Personal care units can be anything from a small studio apartment to a single-room unity with a full bathroom. Assisted living services are slightly different in that they offer additional medical support.

Skilled Nursing Care & Healthcare Centers

Skilled nursing services means 24-hour nursing home care, and can be used for long-term care, end-of-life care, or short-term rehabilitation. Licensed nurses provide skilled nursing care, thus making this a higher-level of care due to the residents’ one-time or ongoing medical conditions. 

Short-term rehabilitation means a temporary stay in this type of care. The resident may have just come out of surgery, had a stroke, or had other serious health issues. They will get the treatment they are needed, recuperate, and then return home. 

Long-term care is meant for those with chronic or progressive conditions. These can include strokes, dementia, or disabilities that are permanent. Due to the seriousness of their health issues, they have access to qualified professionals 24-7. 

End-of-life care can be provided in a skilled nursing facility. This includes hospice care and the care for the patient during the final stages of life. 

Memory Care: End-of-life care can sometimes be provided at a memory care unit, but in general, these units are meant for those with memory loss complications. Memory care units provide a calm, safe environment for those with dementia, Alzheimer’s disease, or any memory-related issues. The staff is specifically trained and provide personal assistance to support these residents. Carefully planned activities are set up with each individuals’ needs in mind. Sometimes these memory care units can be a part of the assisted living or skilled nursing units. 

Types of Contracts in a Life Plan Community

With the name life plan community, it is easily inferred that with this community, the emphasis will be on having a plan for the upcoming stages of life. Unlike many other senior living categories, life plan communities require a legal process and life-care contract upon admittance to the community. But first, seniors must qualify through an application process. With this application, the potential resident will have to provide extensive financial and medical history information. Since life plan communities can be quite expensive, the administrators must be detailed in evaluating potential candidates. They often require health and financial assurances for validation purposes to qualify a resident. They also must be sure there is enough room available at the facilities based on their current care needs.

Once the potential resident has been qualified, they enter into a formal business arrangement for the commitment of time as well as rental or purchase of their living space. The stipulations of these contracts can vary, and specify in print important matters like housing arrangements, residential services, personal health care services, and nursing care. This comes with a guarantee that they will receive the agreed-upon services during their stay in the community. An entry fee is required most of the time, but oftentimes a large part of it is returned to the family later on. 

The present costs of these services will be specified, as well as under what conditions the costs could increase. It also details under what conditions the resident will transfer to varying levels of care. Having a contract in place will protect your loved one’s rights. It is not uncommon to have a lawyer involved in this process. 

There are three main contract types, all distinguished by the American Seniors Housing Association (ASHA). These contracts have majorly different fee scales for personal assistance and nursing care, as well as to what extent care is available without the added expense. We will discuss the three main types, plus any other types of contracts you may be presented with. In practice, however, residents can have contracts that are a blend of these first three types: 

Type A or Life Care Contracts: Communities offering Type A contracts are sometimes called life care communities. Also known as extensive all-inclusive contracts, Type A contracts guarantee the resident shelter, residential services, personal assistance, nursing care, and amenities for the rest of their lives. There will be an initial entrance fee and a monthly payment schedule. The required entry fee may be partially refundable, or non-refundable depending on the length of stay. This type of contract is most often chosen by those living in the independent living units. When they move to assisted living or nursing care accommodations in the community, the residents will continue to pay a monthly fee, only slightly higher. Fees only increase when compensating for increasing operating costs. Under this care plan, the community absorbs the risk of health cost increases for the resident. 

Type B or Modified Contracts: Type B contracts usually have lower monthly fees than Type A contracts. They do still include the same shelter and residential amenities. Not all health care services are included in the initial monthly fee, however. When a resident moves to a higher level of care, they will still be charged the independent living rate, but only for some time, after which they must pay the full or discounted per diem rate. For example, a resident could move to assisted living care for 30 days without a change in monthly cost, but then afterward would pay the market daily rate or discounted daily rate. In this way, they are facing the risk of having to pay more for necessary care.

Type C or Fee-for-Service Contracts: The Type C contracts usually have a lower entrance fee than both Types A and B. Sometimes there is no entrance fee at all. Under this contract, residents will be prioritized or guaranteed admission in the higher levels of care, but are not eligible for discounted health care or assisted living services. Upon admission into the assisted living or nursing home care, these residents will pay a regular price or higher. This type of contract is typically signed by older residents being admitted into an assisted living or nursing home type of care. The Type C contract puts all the risk of high long-term care expenses on the resident.

Type D or rental Agreements: Sometimes communities will offer Type D as a fourth option. Usually, there is no entrance fee required. Instead, there is a monthly fee that includes some of the independent living amenities, and the ability to utilize care services. With this type of contract, you will pay as you go and incur all the risk of all their expenses.

Equity Model: Some communities uncommonly use this type of system where the resident owns the unit they are in, which they will sell once their needs change.

If you are having trouble choosing which is best for your loved one, simply compare the total expected entrance and monthly fees over the expected lifetime for each contract option. Type A and C contracts are becoming increasingly popular, and it is possible that entrance fees have and will increase. Here are some figures to give you a ball-park estimate:

Costs of a Life Plan Community

Life plan communities are by far the most convenient care option for seniors. However, they are also very pricey, though these prices vary widely in the entrance and recurring fees. Before we lay the prices on you, we want to mention that life plan communities can be some of the most expensive senior living options out there. And, life plan communities are paid for out-of-pocket by the resident and/or family. Typically residents pay for their entry fees through the proceeds from selling their residence. The entry fees for studio apartments can range from $40,000 to $90,000. Two-bedroom homes can range from $200,000 to $300,000. Keep in mind that families generally receive back 50 to 90% of the entry fee upon the passing of their loved one. The monthly fee usually ranges from $1,500 to $5,000. And higher-end communities can cost even more. Though the up-front costs are quite high, residents in a life plan community may end up paying less in their last year than in other comparable senior communities. 

Accreditation for Life Plan Communities 

The majority of life plan communities are not reimbursed by Medicaid or Medicare. As a result, there is no mandated requirement to be accredited. Even so, communities strive for independent accreditation. When looking for a life plan community, consider finding one that is CARF-accredited. “CARF” is an acronym for Commission on Accreditation of Rehabilitation Facilities, which is a nationwide accreditor for life plan communities. 

To become accredited, a life plan community should have an internal examination of its programs, and then afterward be exposed to a rigorous on-site survey by CARF. To maintain this accreditation, the community must continually make improvements. This accreditation review is voluntary and paid for by the community.  

Keep in mind, however, that if the life plan community you are looking at is not CARF-accredited, this most certainly does not mean that it is subpar. There are only a few communities that apply for and meet the demanding requirements of CARF. Just know that when you come across a CARF-accredited community, you have found one with a sterling reputation.

Peace of Mind is Priceless

Despite the high price tag, a life plan community gives you something priceless: peace of mind. In this kind of place, today’s seniors can continue to experience life as if they weren’t at a nursing home. They will be surrounded by friends for years, and not have to be uprooted constantly. If you are looking for an option for your loved one in which you do not have to worry, this is it. We here at CareAsOne hope that this article has given you a little bit more of an idea of what you can expect from a life plan community. 

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