Tennessee Medicaid (TennCare) Income & Asset Limits for Nursing Homes & In-Home Long Term Care

Last updated: June 28, 2021


Tennessee Medicaid Definition

The Medicaid program in Tennessee is called TennCare, and the division that provides long-term care assistance for the elderly is called Long-Term Services & Supports.

Medicaid is a wide-ranging, jointly funded state and federal health care program for low-income individuals of all ages. However, this page is focused on Medicaid eligibility, specifically for Tennessee residents, aged 65 and over, and specifically for long term care, whether that be at home, in a nursing home, adult foster care home, or in assisted living.

  The American Council on Aging now offers a free, quick and easy Medicaid eligibility test for seniors.


Income & Asset Limits for Eligibility

There are several different Medicaid long-term care programs for which Tennessee seniors may be eligible. These programs have slightly different eligibility requirements and benefits. Further complicating eligibility are the facts that the criteria vary with marital status (and if one’s spouse is also applying for Medicaid benefits) and that Tennessee offers multiple pathways towards eligibility.

1) Institutional / Nursing Home Medicaid – is an entitlement (anyone who is eligible will receive assistance) & is provided only in nursing homes.
2) Medicaid Waivers / Home and Community Based Services (HCBS) – limited number of participants. Therefore, wait lists may exist. Provided at home, adult day care, adult foster care, or in assisted living. More about waivers.
3) Regular Medicaid / Aged Blind and Disabled – is an entitlement, which means if one meets the eligibility requirements, benefits will be provided. Services are provided at home or adult day care.

The table below provides a quick reference to allow seniors to determine if they might immediately be eligible for long term care via a Medicaid program. Alternatively, one may take the Medicaid Eligibility TestIMPORTANT, not meeting all the criteria below does not mean one is automatically ineligible for Medicaid or cannot become eligible for TennCare. More.

2021 Tennessee Medicaid / TennCare Long Term Care Eligibility for Seniors
Type of Medicaid Single Married (both spouses applying) Married (one spouse applying)
Income Limit Asset Limit Level of Care Required Income Limit Asset Limit Level of Care Required Income Limit Asset Limit Level of Care Required
Institutional / Nursing Home Medicaid $2,382 / month* $2,000 Nursing Home $4,764 / month (Each spouse is allowed up to $2,382 / month)* $4,000 (Each spouse is allowed up to $2,000) Nursing Home $2,382 / month for applicant* $2,000 for applicant & $130,380 for non-applicant Nursing Home
Medicaid Waivers / Home and Community Based Services $2,382 / month $2,000 Nursing Home or “At Risk” $4,764 / month (Each spouse is allowed up to $2,382 / month) $4,000 (Each spouse is allowed up to $2,000) Nursing Home or “At Risk” $2,382 / month for applicant $2,000 for applicant & $130,380 for non-applicant Nursing Home or “At Risk”
Regular Medicaid / Aged Blind and Disabled $794 / month $2,000 None $1,191 / month $3,000 None $1,191 / month $3,000 None


What Defines “Income”

For Medicaid eligibility purposes, any income that a Medicaid applicant receives is counted. To clarify, this income can come from any source. Examples include employment wages, alimony payments, pension payments, Social Security Disability Income, Social Security Income, IRA withdrawals, and stock dividends. Coronavirus stimulus checks (both previous and potential future payments) do not count as income and have no impact on eligibility for Medicaid.

When only one spouse of a married couple is applying for nursing home Medicaid or a HCBS Medicaid waiver, only the income of the applicant is counted. Said another way, the income of the non-applicant spouse is disregarded. However, that does not hold true for married couples with one spouse seeking regular Medicaid. In this case, the income of both spouses is counted towards the income limit. (Click here to learn more about how Medicaid counts income).

There is also a Minimum Monthly Maintenance Needs Allowance (MMMNA), which is the minimum amount of monthly income to which the non-applicant spouse of a Medicaid nursing home applicant or a Medicaid waiver applicant is entitled. As of July 2021, this figure is $2,177.50 / month. (It will increase again in July 2022). That said, a non-applicant spouse may be entitled to as much as $3,259.50 / month if he or she has shelter costs that are significant. (This figure is effective as of January 2021 and will increase again in January 2022). This spousal allowance rule allows the Medicaid applicant to transfer income to the non-applicant spouse to ensure he or she has sufficient funds with which to live. This income allowance is not relevant for couples in which one spouse is applying for regular Medicaid.

*While the above income limit for nursing home Medicaid is $2,382 / month per applicant, a beneficiary cannot keep this amount of income. Instead, one must pay all of his / her income to the nursing home, with the exception of a personal needs allowance of approximately $50 / month, and an income allowance for a non-applicant spouse (if applicable).


What Defines “Assets”

Countable assets include cash, stocks, bonds, investments, credit union, savings, and checking accounts, and real estate in which one does not reside. However, for Medicaid eligibility, there are many assets that are considered exempt (non-countable). Exemptions include personal belongings, household furnishings, an automobile, irrevocable burial trusts, and one’s primary home, given specific criteria is met. For the home to be exempt, a single Medicaid applicant must live in the home or have “intent” to return to it, and his or her equity interest in the home cannot be more than $604,000 (in 2021). (The amount of the home’s value owned by the applicant is his or her equity interest in the home). The home is also exempt, regardless of any other circumstances, if the applicant is married and his or her spouse lives in it.

For married couples, as of 2021, the community spouse (the non-applicant spouse of a nursing home Medicaid applicant or a HCBS waiver applicant) can retain half of the couple’s joint assets, up to a maximum of $130,380, as the chart indicates above. That said, the community spouse is entitled to no less than $26,076, which means he or she is able to retain 100% of the couple’s joint assets up to this amount. This, in Medicaid speak, is called the Community Spouse Resource Allowance (CSRA). This spousal resource allowance is not relevant for couples in which one spouse is a regular Medicaid applicant.

It’s important to be aware that Tennessee has a 5-year Medicaid Look-Back Period. This is a period of 60 months in which Medicaid checks to ensure no assets were sold or given away for less than they are worth in order to meet Medicaid’s asset limit. If one is found to be in violation of the look-back period, a period of Medicaid ineligibility will result.

 For long-term care Medicaid eligibility in Tennessee, an applicant’s functional need is a factor. For nursing home Medicaid and many home and community based services, a nursing facility level of care (NFLOC) is required. Furthermore, additional eligibility requirements might be required for certain benefits. For example, in order for one to receive a personal emergency response system, an inability to safely and independently live at home without it might be required.


Qualifying When Over the Limits

Tennessee has a Medicaid eligibility income cap, and unlike many states, one is not able to “spend down” excess income on medical expenses in order to qualify for Medicaid. However, for elderly Tennessee residents (65 and over) who do not meet the eligibility requirements in the table above, there are other ways to qualify for Medicaid.

1) Qualified Income Trusts (QIT’s) – A QIT allows a way for one to become eligible for long-term Medicaid nursing home care or HCBS waiver services even if he or she is over the income limit. Also referred to as a Miller Trust, this is an irrevocable trust, meaning once it is established it cannot be changed or canceled. In a nutshell, a Medicaid applicant’s income over the Medicaid limit is deposited into a QIT and is not counted towards Medicaid eligibility. A designated trustee manages the account, and the trustee can use the funds for only designated purposes, such as paying unreimbursed medical expenses and health insurance premiums of the Medicaid enrollee. The state of Tennessee must be named as a beneficiary on the account.

Make note, Miller Trusts do not assist one who has assets over the Medicaid qualification limit. Said another way, if one meets the income requirement for Medicaid eligibility, but not the asset requirement, Miller Trusts have no impact on reducing one’s assets. However, one can still meet the asset limit by “spending down” excess assets on non-countable ones. Examples include home modifications (adding a first floor bedroom, remodeling the bathroom to be wheelchair accessible, and adding chair lifts), prepaying funeral and burial expenses, and paying off mortgage, vehicle, and credit card debt. Our spend down calculator can assist persons in determining if they might have a spend down.

2) Medicaid Planning – the majority of seniors considering Medicaid are “over-income” or “over-asset” or both, but still cannot afford their cost of long term care. For persons in this situation, Medicaid planning exists. By working with a Medicaid planning professional, families can employ a variety of strategies to help them become Medicaid eligible and to protect their home from Medicaid’s estate recovery program.
Read more or connect with a Medicaid planner.


Specific Tennessee Medicaid Programs

For all Tennessee residents, TennCare will cover the cost of nursing home care if they are financially qualified and functionally require this level of care. TennCare also offers “Home and Community Based Services” (HCBS). HCBS are offered through a program called CHOICES in Long Term Care. Services offered under CHOICES are intended to help nursing home qualified individuals to live outside of nursing homes, in their own homes, the homes of their loved ones, adult foster care homes, or assisted living residences. The types of care offered includes adult day care, personal care, medical alert devices, transportation assistance, and many others. CHOICES in Long Term Care has limited enrollment and waiting lists may exist. More on TennCare CHOICES.


How to Apply for Tennessee Medicaid

Seniors wishing to apply for TennCare can do so online at TennCare Connect, via the phone by calling 855-259-0701, or by submitting a completed paper application (towards the bottom of the webpage). Persons can also apply in person at their local DHS office. Elderly individuals who already receive TennCare benefits, but wish to receive long-term services and supports via CHOICES, should contact their TennCare health plan. Seniors who would like to receive services via CHOICES, but are not TennCare recipients, should contact their local AAAD (Area Agency on Aging and Disability) office. Persons can also call the Long-Term Services & Supports Help Desk at 877-224-0219 for questions and assistance.

Prior to submitting a Medicaid application in Tennessee, it is imperative that seniors are certain that all eligibility requirements (as discussed above) for the program in which they are applying are met. Persons who have excess income and / or assets, or are uncertain if they meet the eligibility criteria, should seriously consider Medicaid planning for the best chance of acceptance into a Medicaid program. For general information about the long-term care Medicaid application process, click here.

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