Personal Finance & Estate › Medicare, Medi-Cal & long-term care › Long-term care (custodial care Medicare won't pay)
PACE (Program of All-Inclusive Care for the Elderly)
On Lok 1971; national 1997· Government program
Standard practiceWhat most planners, CPAs and attorneys recommend.
A Medicare and Medi-Cal program that bundles all medical and long-term care for frail adults 55 and older living at home.
See it on the Personal Finance & Estate map →How it works
A PACE center's team of doctors, nurses, therapists and drivers takes over all care: clinic visits, a day center, meals, home help, drugs, transport and, if needed, hospital and nursing-home care. To join, a person must be 55+, live in a PACE service area, need nursing-home-level care, and be able to live safely at home. People with both Medicare and Medi-Cal pay nothing; others pay a monthly premium. Main trap: you must switch to PACE's doctors. You can join or leave in any month.
Why it matters for you
Standard practice for eligible frail elders: it can keep a parent with heavy care needs at home with coordinated care, often at no cost on Medi-Cal.
Think of it like
Like a full-service property manager for a person: one team handles every vendor, schedule and emergency.
Rules, limits and sources (2026)
Grew from On Lok, founded in San Francisco's Chinatown in 1971; made a permanent Medicare and Medicaid option by the Balanced Budget Act of 1997. CMS and DHCS list approved programs.
Watch out for
Studies show fewer hospital stays and nursing-home moves, but whether PACE saves public money overall is still debated.
Connections (2)
▸PACE (Program of All-Inclusive Care for the Elderly) is an all-in-one option for Long-term care (custodial care Medicare won't pay)Standard practice
How they connect
PACE takes on a frail person's whole care bill, including the custodial help Medicare alone won't cover, by running an adult day center, clinic and home-care team. It must cover nursing-home care if needed, but its aim is to keep members at home, and most stay there.
When it applies
On Lok began in San Francisco in 1971 as an alternative to nursing homes for Chinatown and North Beach elders; federal demonstration waivers followed in the late 1970s and 1980s.
How sure?
Federal PACE rules (42 CFR Part 460); National PACE Association data report that about 95% of participants live in the community.
Watch out for
Whether PACE can grow fast enough to serve more families, given center-based costs and limited service areas, is an open question.
▸PACE (Program of All-Inclusive Care for the Elderly) is paid by Medi-Cal and Medicare (federal health insurance at 65+)Law or rule (2026)
How they connect
PACE pools both programs' money into one monthly payment per member: Medicare pays a rate similar to an Advantage plan's, and Medi-Cal pays for long-term care. In return PACE covers everything both programs would, including drugs. Members without Medi-Cal pay the Medi-Cal share themselves as a monthly premium.
When it applies
Made a permanent Medicare and Medicaid benefit by the Balanced Budget Act of 1997; California's On Lok was the national model.
The rule
Social Security Act Sec. 1894 (Medicare) and Sec. 1934 (Medicaid); CMS and DHCS contracts with each PACE organization.
Watch out for
Private-pay premiums can run thousands of dollars a month, so whether PACE is realistic for middle-income families without Medi-Cal is debated.