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Presenting a Type C Contract Fee-for-Service

Friday, August 11, 2017

The lower cost of a Fee-for-Service Agreement results in an immediate appeal to mature seniors; however, after visiting multiple communities during the decision-making journey, the prospects have probably been presented with the advantages of other types of contracts. An astute sales counselor must be able to promote your community’s Fee-for-Service Agreement and explain why it most effectively meets their needs and desires.


Traditionally, a Fee-for-Service Agreement offers residential housing and priority access to higher levels of healthcare for the lowest Entry Fee and Monthly Fees. Most often, basic services such as facility maintenance, some utilities, emergency response and minimal housekeeping are included as a part of the Monthly Fee; however in some cases, supportive services are available at an additional cost. Such details are a part of the Residency Agreement.If and when a resident requires a move to a higher level of healthcare, the resident’s monthly fee becomes the market rate for whatever level of care is needed – no courtesy days or discounts.


The lower price of a Fee-for-Service Contract has an immediate appeal; however, don’t be lured into thinking this is all you need to convince prospects that the Type C Agreement is the best one for their situation. Be sure to point out the other advantages of a Fee-for-Service Agreement.

Some older adults are invested in strong long term care (LTC) policies and have been paying their premiums for decades. The policies may contain advantages of high daily payout rates, generous capitations, and cost-of-living adjustment clauses. Typically it would be disadvantageous to drop such a policy so this type of consumer does not need double coverage by entering into a Modified or LifeCare Agreement (there are a few exceptions with indemnified LTC contracts). A Fee-for-Service Agreement dovetails with good long term care coverage. A Fee-for-Service Agreement gives the prospect all the assurances of priority access to quality levels of healthcare and the support of amenities and services at lower Entry and Monthly Fees while in Independent Living.

If the services are not bundled within the Monthly Fee, a resident may customize a service plan according to his/her desires as he/she journeys through the stages of retirement to later retirement years. For example when mature adults are younger, entertaining and dining in restaurants are part of their entertainment so they may not want a meal package. Then as they age and prefer to stay home more, meals or a meal package can be added at a later date. Thus, these particular individuals do not have to pay for things they do not need or want in their earlier years of retirement. They may customize their service plan as they move through different stages of life and health.


The idea of not having to pay for something you do not need is valuable when juxtaposing a Fee-for Service Contract to a LifeCare or Modified Contract. Point out that there is a “gamble” with each one. In the LifeCare and Modified Agreements, an individual is paying for possible healthcare expenses upfront. The gamble is at the beginning of the plan with the outlay of a hearty Entry Fee with the assumption that the healthcare days WILL be utilized later in life. The gamble for the Fee-for-Service Agreement is greater later in life because the investment was not made in prepayment of future health care costs included in an Entry Fee but then a resident may find that healthcare coverage is needed at a later time. One of the secrets in determining which contract is best suited for the prospect is to inquire about his/her comfort level on risk-taking and when he/she wants to take those risks. It is also helpful to know family health history. Do ancestors have chronic debilitating conditions that may cause long admissions into healthcare? Do ancestors or the prospect have a condition that may cause a quick death with little to no time spent in a skilled nursing facility?


If a sales counselor knows his/her community’s agreement and that of the competition, the next step is to truly know the prospect. Particular facts, histories, and risk tolerance are factors in the prospect’s decision making process. Learn as much as possible about the prospect in order to be able to earnestly discuss the various agreement options and the ramifications that each agreement may have on the prospect’s life or life plan.

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