The CCRC Entrance Fee and Florida Medicaid: Reading the Contract Before the Crisis

The Whitfields' entrance fee: what it actually is under Medicaid law

The Whitfields, 86 and 84, moved into a Bradenton continuing care retirement community some years back. Like many Florida retirees, they paid a substantial entrance fee up front and signed a contract they describe, honestly, as something they half remember. They are a composite family I use to illustrate a question that comes up often in my practice: once that entrance fee is paid, what is it, legally, when Medicaid comes into the picture?

Federal law changed this answer in a way that surprises a lot of families. Congress amended the Medicaid statute so that a CCRC entrance fee is treated as a countable resource if three things are true: the funds can be used to pay for the resident's care under the contract if other money runs short, the fee (or what remains of it) is refundable when the resident dies or leaves the community, and the fee gives the resident no ownership interest in the property. Most Florida CCRC contracts check all three boxes.

That means a refundable entrance fee counts against a Medicaid applicant's resource limit even though the resident cannot simply call the business office and ask for a check. The money is treated as available because the contract says it is available to pay for care, and because it comes back out eventually. A non-refundable entrance fee, by contrast, is generally not counted, because once it is paid it is gone, with no future return to the resident or the estate.

Refundable versus non-refundable: the distinction that controls everything

Florida CCRC contracts come in several structures, and the industry generally labels them Type A, Type B, and Type C, with variations in between. A Type A, or "life care," contract typically bundles housing, amenities, and a broad promise of future nursing care into one agreement, often in exchange for a higher entrance fee. The Whitfields remembered signing a Type A contract, but like many residents, they had not revisited the refund schedule in years.

The refund terms matter more than the contract's letter grade. Some CCRC entrance fees are fully non-refundable from day one. Others are refundable on a declining schedule, where the refundable percentage shrinks each month or year the resident lives in the community, until it reaches zero. Still others promise a fixed refundable percentage, commonly somewhere between a modest amount and a larger share of the original fee, that remains refundable to the resident or the estate no matter how long the resident stays.

When the Whitfields' adult daughter finally read the fine print, she found a declining refund schedule: a healthy refundable amount in the first years, shrinking steadily, with several years already behind them. That detail changes the Medicaid math considerably, because only the refundable amount as of today counts as an asset, not the original entrance fee paid at move-in.

The benevolent-care promise: what a Type A contract actually guarantees

Many Type A and some Type B contracts include a provision often called a benevolent care or financial assistance fund. In plain language, this is the community's own promise to subsidize a resident's care if that resident outlives their money through no fault of their own. It is not Medicaid, and it is not a government benefit. It is a private contractual commitment the CCRC makes to its residents, usually funded by a portion of entrance fees collected over the years or by the operator's own reserves.

These provisions vary enormously from one Florida community to another. Some benevolent-care funds are generous and well-funded, with a track record of actually carrying residents through to the end of life. Others are vaguely worded, subject to board discretion, or limited by available funds in a given year. The contract language itself should spell out whether assistance is guaranteed, discretionary, or capped, and what a resident must show, such as having spent down their own resources in good faith, to qualify.

This is also where the Whitfields' story became useful to their family. Their contract did contain a benevolent-care clause, but it was conditioned on the resident having resided in the community for a minimum period and having exhausted personal assets through legitimate living and care expenses, not through gifts or transfers. Reading that clause early, well before a crisis, let their daughter understand exactly what the community would and would not do if her parents' funds ran low.

Does the CCRC even take Medicaid? Ask for the policy in writing

A benevolent-care promise only means something if the underlying nursing care, when it is needed, is delivered in a setting that can later accept Medicaid. Many CCRCs operate their own skilled nursing wing on campus, but not every nursing wing is certified to accept Florida Medicaid, and some communities certify only a limited number of beds for that purpose. This detail is easy to overlook when a family is focused on independent living amenities at move-in, and it becomes critical years later.

I generally tell families to request, in writing, the community's own Medicaid policy: how many Medicaid-certified beds exist in the skilled nursing wing, whether a resident who converted from private pay to Medicaid can remain in that same bed or must transfer, how the benevolent-care fund interacts with a Medicaid application, and what happens procedurally once a resident formally applies through the Department of Children and Families' ACCESS system. A reputable CCRC should be able to produce this policy without hesitation, because it governs how the community treats its own long-term residents.

Spend-down inside a CCRC: what is different here

Spend-down works differently when a resident lives inside a CCRC with a refundable entrance fee, because that fee itself may be the asset standing between the resident and Medicaid eligibility. In some cases, a resident (or their family, acting under a durable power of attorney) can formally request early termination of the contract and repayment of the currently refundable portion, which then becomes available to spend on care, fees, or an allowable transfer, consistent with Medicaid's asset and penalty-period rules.

The mechanics and timing of any such request should be reviewed against the specific contract language and against current Medicaid rules before anything is signed or requested, since missteps here can create unintended delays or penalty periods. This is squarely the kind of fact-specific calculation that belongs in a conversation with an elder law attorney and, where appropriate, the Aging and Disability Resource Center serving the Bradenton area, which can help a family understand local long-term care options and connect them to the Department of Elder Affairs' CARES program for a functional eligibility assessment.

Sources

• Florida Senate, Florida Statutes Chapter 651, Continuing Care Contracts (2026 version)
• Florida Office of Insurance Regulation, Presentation to Governor's Continuing Care Advisory Council, February 6, 2019
• Administration for Community Living, U.S. Department of Health and Human Services, Continuing Care Retirement Communities

This article is for general informational purposes only and does not constitute legal advice, nor does reading it create an attorney-client relationship. Florida estate, elder, probate, and real estate law are fact-specific and change over time. Consult a licensed Florida attorney about your individual circumstances. Arthur Simpson, Esq. is licensed to practice law in the State of Florida. Attorney advertising.