PACE programs have been in operation since the 1970s. The first program was created in San Francisco’s Chinatown. The original program, called On Lok (Cantonese for “peaceful, happy abode”), served families whose elderly relatives had immigrated from China, Italy, and the Philippines. In 1990, the first programs received Medicare and Medicaid waivers to support their efforts. As of 2018, 124 PACE nonprofit programs operated 255 centers and were operating in 31 states.
PACE programs serve individuals who are 55 or older (and eligible for Medicare based on disability, ALS, or end-stage renal disease), are certified by their state to be eligible for nursing-home care, can live safely in the community at the time of enrollment, and live in a PACE service area. Because the PACE programs offer comprehensive services, a PACE participant may not be enrolled in any other Medicare Advantage plan, Medicare prescription drug plan, Medicaid prepayment plan, or optional benefit, such as a 1915c Home and Community Based services waiver. It is important to note that PACE participants are also not eligible for the Medicare hospice benefit.
See PACE Services for a list of services provided in the PACE program. When needed, PACE (with funding from Medicare and Medicaid) pays for hospital or home care, prescription drugs, and other medical services. Services in the adult daycare setting include physical and occupational therapy, recreation therapy, nutritional counseling, transportation, and social-work counseling. Adult daycare also includes meals, social work, and personal care. All prescription drugs are provided.
People who have Medicare but not Medicaid can pay a monthly premium for the long-term care portion of the PACE benefit. There is no deductible or copayment for any drugs or services that the PACE healthcare team approves.
Why aren’t there more PACE programs? The business model is difficult to sustain as aging clients need more extensive services. Participation of a multidisciplinary team is essential but may be difficult to organize in some locations. And in some locations, there may not be a sufficient population of eligible older adults to support the program over time. Some policymakers have suggested lowering or removing the entry age to allow for a larger pool of clients.