LANSING, Mich. (Michigan News Source) – The Program of All-Inclusive Care for the Elderly (PACE) in Michigan is designed to help seniors stay in their homes instead of moving to nursing facilities. It provides coordinated medical care, transportation, therapies, and support services through a local PACE center.
Sounds great – until you read the fine print.
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PACE is a joint Medicare and Medicaid program, authorized under the federal Balanced Budget Act of 1997 after earlier pilot programs proved popular. While Medicare may cover some participants, many enrollees – especially those needing long-term care – are also enrolled in Medicaid.
And that’s where things get sticky.
The catch: Medicaid estate recovery.
Medicaid is not a free ride. Federal law requires states, including Michigan, to pursue estate recovery after a recipient dies – meaning the state can seek repayment from assets like a home. That includes services provided through PACE.
One Michigan woman found that out the hard way recently while handling her mother’s probate estate: “I really doubt my mother was told that this was a hybrid Medicaid program,” she told us. “Her long-term boyfriend was living with her and she wouldn’t have wanted him to be kicked out of the house if she passed away because the state planned to put a claim on the house and it’s value.”
The woman says her mother only used limited services – occasional visits to the facility, basic supplies and insurance payments, and she was provided a metal wheelchair ramp for the home – yet discussions with attorneys and other family members who have dealt with PACE have told her that the Michigan Department of Health and Human Services (MDHHS) could possibly seek repayment of $4,500 per month for her seven months of participation – a whopping bill of over $31,000.
MDHHS reports show total annual estate recoveries the last three years as follows:
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2025 Total Estate Recoveries: $14,780,319.46
2024 Total Estate Recoveries: $13,461,768.17
2023 Total Estate Recoveries: $12,213,402.20
PACE in Michigan.
According to the State of Michigan, there are 28 PACE centers in the state. That includes in places like Detroit, Dearborn, Traverse City, Clinton Township, Portage, Kalamazoo, Battle Creek, Grand Rapids and even Lowell – but zero in the Upper Peninsula.
When Michigan backs off recovery.
Michigan’s Medicaid estate recovery, including for PACE, does include exemptions and waivers that can reduce or eliminate claims. Recovery is deferred (and frequently avoided) if there’s a surviving spouse, a child under 21, or a blind/permanently disabled child of any age. It can also be deferred for a sibling with an equity interest in the home who lived there for at least one year immediately before admission to a medical institution, or a caregiver relative who lived in the home and provided care for at least two years immediately before admission, allowing the beneficiary to remain at home.
Heirs may also request an undue hardship waiver for a home of modest value, a primary income- producing asset like a family farm or business (with limited income), or when recovery would cause significant hardship to survivors (e.g., forcing them to become/remain eligible for public assistance). Waivers are often temporary/conditional but can succeed in qualifying cases.
Also important to note: recovery applies only to probate estates; non-probate transfers (e.g., via Lady Bird deeds) can avoid it.
Read before you sign.
PACE can help seniors stay independent longer – but it’s not just a feel-good benefit. It’s tied to Medicaid, and that means estate recovery is usually part of the deal. Families who don’t understand that upfront may be in for a rude awakening later. What looks like help today can come with a price tag tomorrow – one that could quickly eat away at any inheritance loved ones might be counting on.
