PACE isn’t traditional insurance. It stands for the Program of All-Inclusive Care for the Elderly, a federally supported program that bundles every medical and social service a frail older adult needs into one coordinated package. Think of it as a single organization that becomes your doctor’s office, pharmacy, physical therapy clinic, meal provider, and ride service all at once. Currently, 195 PACE programs operate across 33 states and the District of Columbia, serving roughly 88,700 participants.
How PACE Works
PACE replaces the patchwork of Medicare and Medicaid benefits with a single provider organization that handles everything. Once you enroll, the PACE organization becomes your sole source of healthcare and supportive services. You don’t file claims, manage separate prescription drug plans, or coordinate between specialists on your own. The program does all of that.
The hub of PACE is an adult day health center where participants spend time during the week. There, they receive primary care, therapy, meals tailored to dietary needs, and social activities. Services extend beyond the center walls: home care, hospital stays, nursing home care when needed, and transportation to and from the center and medical appointments are all included. An interdisciplinary team of at least 11 professionals manages each participant’s care. That team includes a primary care provider, registered nurse, social worker, physical therapist, occupational therapist, dietitian, recreational therapist, a home care coordinator, a center manager, a personal care attendant, and even a driver. They meet regularly to build and update a personalized care plan.
What Services Are Covered
PACE covers every service that Medicare and Medicaid would normally cover, plus anything else the care team determines is necessary. The full list includes:
- Primary and specialty medical care, including doctor visits, nursing, lab work, and X-rays
- Hospital and emergency services
- Prescription drugs
- Therapies: physical, occupational, recreational, and speech therapy
- Mental health counseling
- Dental care
- Home care and personal care services
- Nursing home care when medically necessary
- Nutritional counseling and meals
- Social work counseling
- Transportation to the PACE center and all medical appointments
- Preventive care
The key phrase in federal regulations is that PACE also covers services “determined necessary by the interdisciplinary team.” This gives the program flexibility that standard insurance plans lack. If the team decides you need a service that falls outside typical Medicare or Medicaid categories, PACE can still provide it.
Who Qualifies
PACE is designed for people who are 55 or older, live in a PACE service area, and meet their state’s clinical threshold for nursing home level of care. That last requirement is critical: a state assessment must determine that you need the kind of help typically provided in a nursing facility. The whole point of PACE is to let people who would otherwise need a nursing home continue living in the community instead.
Most participants qualify for both Medicare and Medicaid. However, you don’t have to be dually eligible. People who have only Medicare, or who don’t qualify for either program, can still enroll and pay privately, though the cost is higher.
What It Costs
For people who qualify for both Medicare and Medicaid, PACE typically has no monthly premium and no copays or deductibles for any covered service. Medicaid and Medicare make monthly payments directly to the PACE organization on your behalf. If you have Medicare but not Medicaid, you may owe a monthly premium to cover the long-term care portion that Medicaid would otherwise pay. People who don’t qualify for either program can enroll privately, but they bear the full cost themselves.
The financial model is “capitated,” meaning the PACE organization receives a fixed monthly payment per participant regardless of how many services that person uses. This gives the organization a strong incentive to keep participants healthy and out of the hospital, since the cost of an emergency admission comes out of their budget.
The Provider Lock-In Rule
One important trade-off: once you enroll in PACE, you must receive all your care through the PACE organization or providers it authorizes. You cannot see an outside doctor, fill a prescription at a retail pharmacy, or visit a specialist on your own (except in a genuine emergency). Federal regulations require that participants acknowledge this restriction before enrolling. If you have a longstanding relationship with a physician who isn’t part of the PACE network, you would need to switch.
This is the detail that surprises most people. PACE offers extraordinary breadth of coverage, but it requires giving up the freedom to choose your own providers. For some families, that’s a worthwhile exchange. For others, particularly those attached to specific doctors, it’s a dealbreaker.
Health Outcomes for Participants
A CMS evaluation found that PACE participants had significantly better outcomes than similar individuals who didn’t enroll. During the first six months, PACE enrollees were 50% less likely to be hospitalized and spent an average of 1.9 nights in a hospital compared to 6.1 nights for the comparison group. Nursing home use showed an even sharper difference: only about 10% of PACE enrollees had a nursing home admission in the first six months, versus 30% of comparable non-enrollees. PACE participants averaged 6.5 nursing home nights during that period, while the comparison group averaged 22.7.
The survival data is striking. Controlling for baseline health, the evaluation estimated that a typical PACE participant had a median life expectancy of 5.2 years, compared to 3.9 years for someone with similar health characteristics who didn’t enroll. That’s a 33% difference. The one-year mortality rate was about 10% for PACE participants versus 13.5% for the comparison group.
How Enrollment and Disenrollment Work
Enrollment starts with an application and a clinical assessment to confirm you meet nursing home level of care. Once approved and after signing the enrollment agreement, coverage begins on the first day of the next calendar month. There is no open enrollment window; you can join at any time of year.
Leaving the program is straightforward. You can voluntarily disenroll at any time, for any reason, with no penalty. Your disenrollment takes effect on the first of the month after the organization receives your notice, at which point your regular Medicare and Medicaid benefits resume.
A PACE organization can involuntarily disenroll a participant, but only under specific circumstances: unpaid premiums after a 30-day grace period, disruptive or threatening behavior that endangers the participant or others, consistent refusal to follow the care plan, or moving out of the service area for more than 30 consecutive days. The organization must give at least 30 days’ written notice before any involuntary disenrollment takes effect. If a participant no longer meets the state’s nursing home level of care threshold, they can also lose eligibility, though many states have provisions that allow participants to remain enrolled even after their condition improves.
Availability and How to Find a Program
PACE operates in 33 states plus the District of Columbia, but coverage is far from universal. Programs are tied to specific service areas, often centered around a single city or county. Rural areas and many smaller states have no PACE programs at all. The National PACE Association maintains a searchable directory at npaonline.org where you can check whether a program exists near you or a family member. Your local Area Agency on Aging can also help identify options and walk you through the application process.