What is a Medicare PACE program?
Written by: Rachael Zimlich, RN, BSN
Reviewed by: Malinda Cannon, Licensed Insurance Agent
Program of All-Inclusive Care for the Elderly (PACE) is a program operated jointly by Medicare and Medicaid.
The goal is to keep people aged 55 and older with special medical needs in their homes longer, avoiding nursing home or hospital care.
PACE provides medical care and community services to meet a diverse set of needs for this special group.
The program offers comprehensive care and cost savings for members.
What is PACE Health Insurance?
Programs of All-Inclusive Care for the Elderly (PACE) is a health insurance program that combines the efforts of the federal government (through Medicare) with state governments (through Medicaid) to keep seniors in their homes longer. These healthcare agencies work together with community service organizations to meet the needs of older adults in the hope that they can avoid needing nursing home care or frequent hospital admissions.
If you are enrolled in the PACE plan, all the services normally provided through Medicare and Medicaid are administered through the PACE plan.
Eligibility for PACE
PACE is available to anyone who is either in Medicare or Medicaid—or both—and meets specific criteria.
- be age 55 or older.
- live in a state or area that participates in the PACE program.
- require nursing home-level of care as determined by your state Medicaid program.
- be able to safely remain in the community with the help of PACE services.
PACE covers any medical or community services your care team decides are necessary for you to remain safe in the community. This includes all the services normally provided under Medicare and Medicaid, plus any others your healthcare team determines are needed to improve or maintain your health, including:
- medical care
- home healthcare services
- hospital visits
- nursing home care (as needed)
- adult day care services
- dental care
- emergency care
- laboratory and X-ray services
- nutrition counseling
- occupational therapy
- physical therapy
- preventive care
- social work services
- prescription medications
Normally under Medicare, you would need to sign up for a Part D prescription drug program. Prescription coverage is an optional benefit under Medicaid, but every state currently offers some type of coverage.
With the PACE program, though, you don’t need any other plans or permissions for your prescription medications. The PACE program covers all medications that otherwise would have been covered by Medicare Part D and then some. If you are already enrolled in a prescription drug plan when you join a PACE program, you will be unenrolled and receive your medications through PACE instead.
How much you pay for a PACE program depends on your income level and whether you qualify for Medicare, Medicaid, or both.
If you qualify for Medicare but don’t have Medicaid, you will pay monthly premiums for the long-term care portion of the PACE program and your prescription medications. However, unlike traditional Medicare, you will not pay any deductibles or copayments for any services or medications through the PACE program.
If you have Medicaid, you won’t pay the premiums required under Medicare alone.
If you don’t qualify for either Medicare or Medicaid, you can still join a PACE plan and pay your costs out of pocket.
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PACE Income Limits
While there are no income limits for overall eligibility in a PACE program, what you make indirectly impacts what you’ll pay for PACE. As discussed above, your rates for PACE healthcare are determined by whether you have Medicaid, Medicare, both, or neither. Medicaid eligibility is often partly income-based. If you don’t qualify for Medicaid and sign up for PACE with Medicare, you will have to pay premiums for long-term care and prescription drug coverage. Without either Medicaid or Medicare, you’ll need to pay for your PACE privately.
Eligibility varies for PACE programs by state because e ach state sets its own rules for Medicaid. Depending on where you live, you may also have to meet additional financial requirements in order to receive full Medicaid coverage under the PACE program. For example, in Pennsylvania, you must have an income under $14,500 as an individual or $17,700 as a couple to receive full coverage for prescription medications through PACE.
Is PACE a Medicare Advantage Plan?
No — PACE and Medicare Advantage are two different programs. PACE plans usually focus on helping the most medically needy individuals safely stay in their communities, Medicare Advantage plans are available to anyone who qualifies for Medicare. Medicare Advantage does offer Special Needs Plans that are designed for those with extensive medical needs, but these plans may or may not cater to the goal of keeping you at home.
Another big difference is that Medicare Advantage is a private insurance program that offers plans that help cover your Medicare-approved medical expenses. PACE, on the other hand, is a program that allows your healthcare team to define your covered needs. PACE also employs its own medical and caregiving staff, while Medicare Advantage plans are primarily payer organizations.
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