Nursing Home Medicaid Guide for Tennessee

Income Rules

• The income limit for nursing home Medicaid is 300% of the SSI federal benefit rate — approximately $2,829 per month in 2025.
• Only the applicant's income counts (not the spouse's income in most cases).
• Income includes Social Security, pensions, annuities, and any other regular payments.
• If your income exceeds the limit, a Qualified Income Trust (Miller Trust) may allow you to qualify by redirecting excess income into the trust.

Asset Limits

• Individual asset limit: $2,000 in countable assets.
• Countable assets include: bank accounts, stocks, bonds, CDs, cash value of life insurance (if face value exceeds $1,500), additional vehicles, and property other than your home.
• Exempt (non-countable) assets: your primary home (if spouse or dependent lives there, or you intend to return — equity limit of $713,000 in 2025), one vehicle, personal belongings, household furnishings, prepaid burial/funeral plans, and certain small life insurance policies.
• If your assets exceed the limit, you must 'spend down' to qualify. Legitimate spend-down includes paying debts, home repairs, purchasing exempt assets, or prepaying funeral expenses.

Spousal Protections

• Federal law protects the spouse who stays at home (the 'community spouse') from impoverishment.
• Community Spouse Resource Allowance (CSRA): The at-home spouse can keep up to $154,140 in countable assets (2025 figure). The minimum is $30,828.
• Monthly Maintenance Needs Allowance (MMNA): The at-home spouse can receive a monthly income allowance of up to $3,853.50 (2025) from the nursing home spouse's income.
• The community spouse keeps their own income — it is not counted toward the nursing home spouse's eligibility.
• The family home is generally protected as long as the community spouse lives there.

The 5-Year Look-Back Period

• When you apply for nursing home Medicaid, Tennessee reviews all financial transactions from the past 5 years (60 months).
• Any assets transferred for less than fair market value (gifts, property transfers, etc.) may trigger a penalty period during which Medicaid will not pay for nursing home care.
• The penalty period is calculated by dividing the transferred amount by the average monthly cost of nursing home care in Tennessee.
• Example: If you gave away $70,000 and the average monthly cost is $7,000, you face a 10-month penalty period.
• This means planning ahead is critical. Consult an elder law attorney well before you need nursing home care.
• Exceptions: Transfers to a spouse, to a disabled child, transfers of the home to certain family members, and transfers where the applicant received fair market value.

How to Apply for Nursing Home Medicaid

• 1. Get a Pre-Admission Evaluation (PAE): A medical assessment must confirm that you need nursing home level of care. The nursing home or hospital social worker can arrange this.
• 2. Gather all financial documents: 5 years of bank statements, property records, insurance policies, retirement account statements, and records of any asset transfers.
• 3. Apply at your local DHS office: Nursing home Medicaid applications are handled in person. The nursing home social worker can often help with the application.
• 4. Complete the financial assessment: DHS will review your income and assets. Be thorough and honest — undisclosed assets discovered later can result in penalties.
• 5. Choose your MCO: If approved, you will be enrolled in the CHOICES program through one of TennCare's managed care organizations.

Estate Recovery

• After a TennCare member passes away, Tennessee may seek to recover Medicaid costs from the deceased person's estate.
• Estate recovery typically applies to the home and other probate assets.
• Exceptions: Recovery is deferred or waived if a surviving spouse, child under 21, or disabled child lives in the home.
• Recovery only applies to benefits received after age 55 (or any age for nursing home care).
• An estate recovery claim can sometimes be reduced or waived for undue hardship.
• Planning with an elder law attorney can help protect assets from estate recovery.

Alternatives to Nursing Home Care

• CHOICES Home and Community-Based Services: TennCare's CHOICES program also covers home and community-based services as an alternative to nursing home placement.
• This may include home health aides, adult day care, assistive technology, home modifications, and personal care services.
• The same income and asset rules generally apply for CHOICES HCBS.
• Program of All-Inclusive Care for the Elderly (PACE): Available in some areas, PACE provides comprehensive medical and social services to help seniors stay at home.
• Veterans benefits: Veterans and their spouses may qualify for Aid and Attendance benefits that can help pay for care.

Key Contacts

Documents You Will Need

Nursing home Medicaid requires extensive financial documentation. Gather these items before applying:

• Photo ID (driver's license, state ID, or passport)
• Social Security card or number for everyone on the application
• Proof of Tennessee residency (utility bill, lease, or mail with your address)
• Proof of U.S. citizenship or immigration status (birth certificate, passport, or immigration documents)
• Proof of income for everyone in the household (pay stubs, tax return, Social Security statement, employer letter)
• Bank statements (checking and savings) for the past 30 days
• 5 years of bank statements (checking, savings, CDs, money market)
• 5 years of financial records (all accounts)
• Property deeds and mortgage statements
• Vehicle titles and registrations
• Life insurance policies (face value and cash value)
• Retirement account statements (401k, IRA, pension)
• Annuity contracts
• Records of any assets sold, transferred, or gifted in the past 5 years
• Burial/funeral pre-payment contracts
• Medicare card
• Social Security benefit statement (SSA-1099)
• Pension income documentation
• Marriage certificate (if married)
• Spouse's financial documents (income and assets)
• Pre-Admission Evaluation (PAE) or medical records showing need for nursing home care
• Power of Attorney documents (if someone is applying on behalf of the patient)