Frail seniors who qualify for nursing home admission face a stark choice: enter a facility or find a way to stay home with adequate medical support. The Program of All-Inclusive Care for the Elderly, known as PACE, was built to offer a third path. It merges Medicare and Medicaid funding into a single care plan that delivers medical services, adult day programs, home health aides, and transportation directly to participants living in the community, with no deductibles or cost-sharing for those who are dually eligible. The model works where it exists, but uneven geographic availability means many seniors who could benefit never learn about it or cannot access a local program.
How PACE keeps nursing-home-eligible seniors in the community
PACE targets a specific population: adults aged 55 and older who meet their state’s clinical threshold for nursing home placement yet can still live safely outside an institution. The program operates through local organizations that receive fixed monthly payments from Medicare and Medicaid to cover all needed services. An interdisciplinary care team, rather than a single physician, coordinates everything from prescription drugs and specialist visits to meals and physical therapy. Because the PACE organization bears full financial risk, it has a direct incentive to keep participants healthy and out of hospitals or nursing facilities.
For dual-eligible participants, those enrolled in both Medicare and Medicaid, the covered benefit package comes at no out-of-pocket cost. That zero-dollar exposure removes a financial barrier that often pushes frail older adults toward institutional care, where Medicaid picks up the bill after personal savings are exhausted. People who have Medicare only, without Medicaid, can still enroll but must pay a monthly premium to cover the long-term care portion. According to federal program descriptions, Medicare enrollees who join PACE receive their hospital, medical, and prescription drug coverage through the PACE organization instead of through separate plans, simplifying what is often a fragmented benefit structure.
PACE organizations must be approved and monitored by federal and state authorities. The Centers for Medicare & Medicaid Services describes program oversight as a joint responsibility, with CMS setting core conditions for participation while states define eligibility criteria and service areas. This shared framework allows states to tailor PACE to local long-term care systems while maintaining consistent federal standards around safety, quality, and financial solvency.
Peer-reviewed outcomes and federal rule changes shaping PACE
A comparative study published in The Gerontologist examined whether PACE enrollees were less likely to transition into long-term nursing home stays than seniors receiving services through Medicaid 1915(c) home and community-based waivers. The research findings indicated that PACE participants faced a lower risk of permanent institutional admission than their waiver counterparts, lending empirical weight to the program’s core promise of sustained community living.
On the regulatory side, the Centers for Medicare and Medicaid Services issued a final rule aimed at modernizing oversight of PACE organizations. That rule updated quality measurement, participant protections, and administrative requirements while preserving the program’s focus on keeping frail elders at home. CMS framed the changes as a way to strengthen accountability without undermining the flexibility that allows PACE teams to tailor care plans to individual needs.
The hypothesis that expanding PACE service areas would produce measurable drops in Medicaid-funded nursing facility days among dual eligibles within two years is plausible on its face, given the study’s findings. But publicly available CMS and state claims files do not yet contain granular, current-year data linking new PACE service-area approvals to reduced institutional utilization at the state level. Without that linked dataset, the causal chain from expansion to savings remains directional rather than confirmed.
Gaps in access and data that limit PACE’s reach
The biggest unresolved challenge for PACE is not whether the model can work, but whether eligible seniors can realistically enroll. Programs are concentrated in certain metropolitan regions, leaving large rural and suburban areas without any PACE option. Because enrollment is limited to people who live within a designated service area, older adults who reside just outside a boundary may be clinically eligible yet effectively excluded. Transportation distances, workforce shortages, and the capital costs of opening new centers all slow the pace of geographic growth.
Awareness is another barrier. Hospital discharge planners, primary care physicians, and families often default to traditional nursing home placement or piecemeal home health services because they have never heard of PACE or assume it is available only in select cities. Marketing budgets for nonprofit PACE organizations are modest, and state agencies may not consistently present PACE alongside other long-term care options during eligibility assessments. As a result, many dual-eligible seniors enter institutions without ever being offered a community-based alternative that could have met their needs.
Data limitations compound these access issues. While individual studies suggest that PACE can reduce nursing home entry and stabilize health outcomes, there is no routinely updated, nationwide dataset that tracks how new program openings affect institutional use, hospitalizations, or total Medicaid spending over time. States considering whether to authorize additional PACE sites must therefore rely on modeling, older research, or experiences from other jurisdictions rather than on real-time evidence drawn from their own populations.
Closing these gaps would require coordinated action: more transparent reporting from existing PACE organizations, standardized state-level metrics on long-term care utilization, and federal support for linking enrollment data with claims outcomes. Until then, PACE will remain a promising but unevenly available option-highly effective for those who can reach it, and largely invisible for the many frail seniors who cannot.
