New PRI Study: Reforms to Expand PACE Program Could Save Taxpayers Billions, Improve Senior Care

SACRAMENTO, Calif., Aug. 4, 2025 /PRNewswire/ -- A new issue brief released today by the Center for Medical Economics and Innovation at the Pacific Research Institute calls for reforms to expand the reach of the Program of All-Inclusive Care for the Elderly (PACE), a joint Medicare and Medicaid program that delivers comprehensive medical and social care services to lower-income seniors eligible for nursing home-level care so they can live safely at home.

Click here to download the brief

Expanding PACE's reach by supporting additional for-profit providers participating in the program can yield significant savings and better patient outcomes. Calculations in the brief show the PACE model currently saves an average of $2,800 per participant per month, or $33,600 annually. With 84,000 current participants, this is over $2.8 billion in annual taxpayer savings.

"PACE is not generating theoretical savings—these are real, measurable savings that benefit Medicare and Medicaid, while giving patients the dignity of receiving care in their homes," said Dr. Wayne Winegarden, director of PRI's Center for Medical Economics and Innovation and the brief's author.

The brief details how PACE's 2015 expansion allowing for-profit participation has fueled rapid program growth. For-profit entities have outpaced nonprofits in contract and enrollment growth thanks to their access to capital, which is essential for launching new PACE centers that typically require between $5 million and $10 million in startup costs.

It cites research from the Journal of the American Geriatric Society, which found that "PACE enrollees experienced lower rates of hospitalization (and) readmission." The Commonwealth Fund noted the program's "reductions in long-term nursing facility placements; reductions in mortality . . . and better reported health status and quality of life."

The brief also dispels concerns about service quality, noting that government reviews show no statistically significant differences in outcomes between nonprofit and for-profit PACE centers.

To unlock PACE's full potential, the brief outlines several urgent reforms, including:

• Maintaining the 2015 expansion allowing for-profit providers to participate, ensuring continued access to the capital needed to launch new centers.
• Streamlining federal regulations that delay new program applications and increase costs for providers.
• Expanding eligibility criteria to include high-need, high-cost seniors who currently do not qualify under narrow Medicaid rules.

"For-profit providers are making it possible to bring the benefits of PACE to more seniors, expanding services into underserved communities and meeting the significant upfront capital needs required to launch new centers —without compromising on quality," Winegarden said. "PACE should be a cornerstone of targeted reform—an example of how we can save taxpayer dollars while delivering higher-quality care."

PRI's Center for Medical Economics and Innovation (www.medecon.org) aims to educate policymakers, regulators, health care professionals, the media and the public on the critical role that new technologies play in improving health and accelerating economic growth.

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SOURCE Pacific Research Institute