The Program of All-Inclusive Care for the Elderly (PACE) offers a comprehensive care model for seniors who require a nursing home level of care but wish to remain living independently within their community. This program integrates and manages all medical, social, and long-term care services through an interdisciplinary team. Understanding the cost of PACE is complex because it is not a fixed rate and depends entirely on the participant’s existing financial and health coverage status. The monthly cost structure is all-inclusive, but the amount a person pays is determined by which government benefit programs they qualify for.
Determining Cost Based on Eligibility Status
The cost of participation in PACE is determined by an individual’s eligibility for two key government programs: Medicare and Medicaid. These programs establish the three main financial categories that dictate the monthly premium a participant will face.
The most common category is the dual-eligible participant, who qualifies for both Medicare and Medicaid benefits. A second category includes Medicare-only participants whose income or assets are too high to qualify for Medicaid. The third category is for private-pay participants who have neither Medicare nor Medicaid, though this group is rare.
Medicaid’s financial role is significant because it acts as the payer of last resort, covering the long-term care portion of the monthly premium that Medicare does not fund. Qualification for Medicaid essentially dictates whether the participant will be responsible for a substantial monthly premium.
Costs for Dual-Eligible Participants
The vast majority of people enrolled in PACE are dual-eligible, qualifying for both Medicare and Medicaid benefits. For this group, the monthly comprehensive PACE premium is typically zero dollars. This zero-premium structure covers all services deemed medically necessary by the PACE interdisciplinary team.
The payment mechanism involves a capitated system. Medicare pays the PACE organization a set monthly rate for medical services, and Medicaid pays a separate monthly rate to cover long-term care services. This Medicaid payment covers services like home care, adult day center attendance, and personal care. This combined government funding allows the participant to receive all-inclusive care without paying a monthly premium.
While the PACE premium is usually eliminated by Medicaid, dual-eligible participants must still maintain their standard Medicare Part B coverage. The state Medicaid program often pays the monthly Part B premium for this group. Additionally, dual-eligible participants are automatically eligible for the Part D Low-Income Subsidy, which covers their Medicare Part D drug premium, minimizing out-of-pocket costs.
Costs for Medicare-Only Participants
Medicare-only participants, who are eligible for Medicare but not Medicaid, face a different cost structure involving a monthly premium paid directly to the PACE organization. Since Medicaid does not cover long-term care services, the participant must pay a monthly premium for this portion of the benefit package. This required payment is equivalent to the Medicaid capitation amount the program would otherwise receive.
This monthly fee covers the entire spectrum of long-term care services, including adult day health services, home care, transportation, and other supports required to live safely in the community. Because this premium covers the full cost of long-term care, it can be substantial, often ranging from $4,000 to $5,000 per month. The exact amount varies based on the specific PACE program and geographic location.
Medicare-only participants are also responsible for their standard Medicare Part B premium. They must also pay a premium for Medicare Part D prescription drug coverage, which is collected by the PACE organization. This means Medicare-only participants are paying the full cost of the long-term care component, making the cost comparable to private pay options or assisted living expenses. The monthly premium is a single, all-inclusive payment that covers all medically necessary services and eliminates the need for separate copayments or deductibles for approved care.
Out-of-Pocket Expenses and Liability
A significant feature of the PACE model is the elimination of most standard out-of-pocket costs for approved services, regardless of the participant’s eligibility status. Once enrolled, there are typically no deductibles, copayments, or coinsurance charges for any drug, service, or care the interdisciplinary team determines is needed. This applies to all services, from primary care visits and prescription drugs to physical therapy and hospital stays.
The primary financial risk involves the strict liability rule for unauthorized care. Participants must agree to receive all required healthcare services, other than emergency services, exclusively through the PACE organization or authorized providers. If a participant seeks non-emergency care or services outside of the approved PACE network without prior authorization, they become fully liable for the entire cost of those services.
The program will not pay for any unapproved outside care. The PACE organization assumes full financial risk for all services the participant needs, but the participant must adhere to receiving all care through the program’s defined network. Some participants may also be responsible for a Medicaid “share of cost” if their income exceeds the state’s Medicaid threshold, or a co-pay if they move into supportive housing like a nursing home.