TennCare's financial rules for long-term care

What if a parent's income is above TennCare's $2,982 limit?

Income above $2,982 a month in 2026 does not automatically disqualify someone from TennCare long-term care: TennCare's CHOICES page says a person over the cap may be able to set up a Qualifying Income Trust, which holds the excess income so the person can meet the limit.

A Qualifying Income Trust (often called a Miller trust) receives the income above the cap each month and pays it toward care costs under rules TennCare sets. Setting one up correctly matters: the wrong trust language or a missed monthly deposit can cost eligibility. This is the point at which most Memphis families should talk to an elder law attorney.

What is TennCare's look-back period?

TennCare checks the previous five years for gifts or sales below fair value; transfers in that window can cause a penalty period during which TennCare will not pay for long-term care, according to TennCare's CHOICES eligibility rules.

Typical problem transfers are cash gifts to children or grandchildren, adding a child to a deed, or selling a car or house to a relative for less than it is worth. Keep five years of bank statements and records of large withdrawals, and write down what each one was for; it is much easier to explain a payment to a contractor or a hospital bill with a receipt in hand.

How much can a spouse keep when the other spouse needs TennCare long-term care?

Federal spousal impoverishment standards for 2026 let the at-home spouse keep countable resources within a range of $32,532 to $162,660 and set a minimum monthly maintenance needs allowance of $2,705 (from July 1, 2026) up to a maximum of $4,066.50; TennCare applies these standards to calculate each couple's protected amounts.

Source: CMS Informational Bulletin, Updated 2026 SSI and Spousal Impoverishment Standards (April 27, 2026).

The at-home spouse's own income is not counted against the spouse who needs care, and some of the institutionalized spouse's income can be diverted to the at-home spouse if the at-home spouse's income falls below the allowance. The exact protected amount depends on the couple's assets on the first day of a continuous institutional stay, so do not move money between spouses before getting advice.

How much income does a TennCare nursing home resident keep?

A TennCare-funded nursing facility resident keeps a personal needs allowance of $50 a month (rule 1200-13-01-.08(1)(a)); most of the rest of their income is paid to the nursing home as patient liability, after allowances such as a spouse's income allowance and health insurance premiums.

The personal needs allowance is meant for clothing, haircuts and personal items. For CHOICES Groups 2 and 3, the allowance is higher because the person lives in the community and must pay rent and food; the rule caps it at 300% of the SSI federal benefit rate. That higher community allowance is what makes room and board in an ACLF payable for some CHOICES members.

Does TennCare count the house?

The home where the applicant lives does not count toward the $2,000 resource limit, but federal law caps the home equity a long-term care applicant may hold, with 2026 limits between $752,000 and $1,130,000 depending on the state's election, so confirm Tennessee's figure with TennCare if the home is valuable.

Selling the house after TennCare approval can change eligibility, because the proceeds become a countable resource. Tennessee also has an estate recovery program that may seek repayment from a deceased member's estate for long-term care costs; ask an elder law attorney how it would apply before making decisions about the house.