If you’re considering PACE but receive Social Security, you’re probably wondering about the costs. Here’s the surprising truth: your Social Security income could mean the difference between paying nothing and facing substantial monthly premiums for the exact same services
Key Takeaways
- Social Security benefits count as income for Medicaid eligibility, which affects PACE program costs but not initial program qualification.
- PACE participants who qualify for Medicaid pay no premiums, while those with Medicare-only coverage face monthly charges for long-term care services.
- Income limits vary significantly by state, with some states allowing up to $2,901 monthly while others cap eligibility at much lower thresholds.
- Multiple income sources beyond Social Security factor into Medicaid calculations, including pensions, wages, and investment earnings.
- State Medicaid offices provide the most current requirements for PACE eligibility and can clarify how specific income affects individual situations.
Understanding how Social Security impacts PACE program costs requires examining the connection between income limits and Medicaid eligibility. While Social Security doesn’t prevent someone from joining PACE, it directly influences the monthly expenses participants face.
Social Security Affects PACE Costs Through Medicaid Eligibility
Social Security benefits count as income when determining Medicaid eligibility for PACE programs. This creates an indirect but significant impact on program costs. PACE operates as a dual Medicare-Medicaid program, meaning participants’ financial obligations depend heavily on which government programs they qualify for based on their total income.
The distinction matters because Medicaid-qualified participants receive full coverage without monthly premiums, while those who exceed income limits face substantial out-of-pocket costs. For detailed information about Medicare and Medicaid programs, Medicare.org provides guidance on eligibility requirements and coverage options.
Most seniors receive Social Security as their primary income source, making these benefits the determining factor in Medicaid qualification. When combined with other income sources like pensions or part-time work, Social Security often pushes total monthly income above state-established thresholds.
PACE Program Eligibility Requirements
Age, Location, and Care Level Requirements
PACE eligibility starts with meeting four basic criteria that have nothing to do with income. Participants must be at least 55 years old, live within a PACE organization’s service area, require nursing home-level care as certified by their state, and demonstrate the ability to live safely in the community with PACE support.
These requirements establish medical necessity rather than financial need. As of 2025, 184 PACE programs operate across 33 states and the District of Columbia, serving more than 82,000 seniors who meet these baseline qualifications. The program’s availability remains limited geographically, with many rural areas lacking access to PACE services.
How States Set Income and Asset Limits
Individual states establish their own Medicaid income limits within federal guidelines, creating significant variation in PACE affordability. Many states follow the federal standard of 300% of the Federal Benefit Rate, which equals approximately $2,901 monthly for individuals in 2025. However, some states impose much stricter limits, such as Pennsylvania with individual limits of $1,208 monthly.
Asset limits also vary by state, though most maintain the $2,000 threshold for countable resources. States cannot consider the participant’s primary residence if its value stays under $636,000 in 2025, providing some protection for homeowners entering PACE programs.
How Social Security Income Impacts Your PACE Costs
Medicaid-Qualified Participants Pay No Premium
Participants who qualify for both Medicare and Medicaid receive the most affordable PACE experience. These dual-eligible individuals pay no monthly premiums for long-term care services, no deductibles, and no copayments for approved prescription drugs, services, or care.
This full coverage extends beyond standard Medicare and Medicaid benefits. PACE provides additional services like dental care, vision care, transportation, meals, and social services when deemed medically necessary by the participant’s care team.
Medicare-Only Participants Pay Monthly Premiums
Seniors whose Social Security and other income exceed Medicaid limits can still join PACE through Medicare Parts A and B coverage. However, these participants face monthly premiums for the long-term care portion of PACE services, plus potential premiums for Medicare Part D prescription drug coverage.
The exact premium amounts vary by PACE organization and location. While these costs can be substantial, many families find them more affordable than private nursing home care or home services purchased independently.
What Income Counts Toward Medicaid Eligibility
Income That’s Included in Calculations
Medicaid calculations include gross Social Security and SSI benefits, excluding Medicare premiums that are automatically deducted. Additional counted income sources include railroad retirement benefits, gross pensions, salaries and wages, self-employment income, alimony, taxable annuities and IRA distributions, unemployment benefits, and investment earnings.
For married couples living together, both spouses’ income gets combined for eligibility determination. This joint calculation often pushes couples above individual limits even when each spouse’s separate income would qualify. Gift and inheritance income over $300 also counts, as do gambling winnings and contest prizes.
Income That’s Excluded from Calculations
Several income types don’t count toward Medicaid limits, providing some relief for PACE applicants. Excluded income includes property tax and rent rebates, VA Aid and Attendance benefits, certain AmeriCorps Vista payments, civil lawsuit settlements, SNAP food stamp benefits, and LIHEAP utility assistance.
Medicare Part B premiums, black lung and white lung benefits, housing allowances for religious order members, and the first $10,000 of death benefit payments also receive exclusions. Federal stimulus payments don’t count as income, nor do VA dependency and indemnity compensation payments.
Understanding State-Specific Requirements
Pennsylvania PACE Program Limits
Pennsylvania operates one of the more restrictive PACE income systems, with individual limits set at approximately $1,208 monthly and married couple limits at approximately $1,475 per month. These figures fall well below federal guidelines and Social Security’s average monthly benefit.
Pennsylvania determines eligibility based on the previous calendar year’s income, not current-year earnings. This retrospective approach can create complications for seniors whose income fluctuated or who experienced significant changes in their financial situation.
Massachusetts PACE Program Requirements
Massachusetts follows more generous federal guidelines, allowing countable income up to 300% of the federal benefit rate while maintaining the standard $2,000 asset limit. This approach enables more seniors to qualify for Medicaid-covered PACE services, particularly those receiving average or above-average Social Security benefits.
The state’s alignment with federal standards provides greater predictability for families planning PACE enrollment, as income limits remain consistent with other Medicaid programs throughout Massachusetts.
Federal Guidelines Within State Parameters
Federal regulations establish minimum standards while allowing states to set more restrictive limits if desired. Most states adopt the 300% federal benefit rate standard, but variations exist based on state budget considerations and political priorities.
These differences create significant inequality in PACE access nationwide. Seniors with identical income and care needs may qualify for free PACE services in one state while facing substantial monthly premiums in neighboring states with lower income limits.
Contact Your State Medicaid Office for Current Requirements
Income limits and eligibility requirements change annually, making direct contact with state Medicaid offices necessary for accurate information. Local offices can provide current income thresholds, explain how specific income sources affect eligibility, and clarify asset limit calculations for individual circumstances.
State Medicaid representatives can also discuss spend-down options for seniors whose income slightly exceeds limits. These programs allow participants to qualify for Medicaid by incurring medical expenses that reduce their countable income to eligible levels.
Many states offer specialized Medicaid programs for long-term care that differ from general Medicaid requirements. These variations can significantly impact PACE eligibility and costs, making professional guidance valuable for families during the application process.