Most Americans assume Medicaid is a single program. In Tennessee the umbrella is TennCare, and long-term-care services are delivered through a specific TennCare program called CHOICES— a managed-long-term-services-and- supports (MLTSS) model that contracts with three private MCOs to actually coordinate care.1Understanding the architecture matters because the path from “applied” to “in care” runs through the MCO, not through TennCare directly.

The three CHOICES groups

TennCare CHOICES is internally divided into three groups, each serving a different population and authorizing a different mix of services.

Group 1 — Nursing facility care

For Tennesseans who meet nursing-facility level of care and need (or choose) institutional placement. The MCO authorizes the placement, pays the nursing home, and coordinates medical services. Most Group 1 enrollees are long-stay residents whose private-pay funds were exhausted by nursing-home costs.

Group 2 — Home and community-based services (HCBS)

For enrollees who meet nursing-facility level of care but choose to receive services at home or in a community setting. The MCO authorizes in-home personal care, adult day services, home modifications, and related supports under an individualized service plan. Tennessee’s rebalancing effort over the past decade has shifted significant LTC utilization from Group 1 to Group 2.2

Group 3 — Consumer-Directed Workforce

For enrollees who don’t meet full nursing-facility level of care but need ongoing supports to remain in the community. Group 3 is also the self-direction track — the framework that allows the recipient to hire and pay a personal-care worker, often an adult child or other family member (with limited exceptions for spouses).3

Three eligibility tests, in order

1. Medical eligibility (level of care)

Before financial review, your parent needs a level-of-care assessmentestablishing they meet the nursing-facility level of care for Group 1 or Group 2, or the lower “at risk of institutionalization” criteria for Group 3. The assessment evaluates activities of daily living, cognitive status, medical needs, and the availability of informal supports. Wait times for the assessment vary by region and have improved since the 2016 statewide MLTSS rollout but can still run two to six weeks.

2. Income

Tennessee uses the federal SSI-based income cap of roughly $2,829/monthin 2026 (300% of the federal benefit rate, the standard institutional Medicaid cap). If your parent’s gross monthly income from all sources — Social Security, pension, retirement-account distributions, annuity payments — exceeds that cap, they’re not disqualified. They’ll need a Qualified Income Trust (QIT, sometimes called a Miller Trust).

3. Assets

The applicant’s countable assetsmust be at or below $2,000 at the moment of application. The word “countable” is doing significant work in that sentence.

Not counted (in most cases):

Counted:

The five-year look-back

Tennessee applies the standard federal 60-month look-back. Any uncompensated transfer of assets — gifts to children, below-market sales, charitable contributions above modest levels — made in the 60 months before application generates a penalty period during which the applicant is otherwise eligible but TennCare CHOICES will not pay for nursing-home care.

The penalty math is straightforward: the value of the transfer divided by Tennessee’s penalty divisor (set annually by TennCare and approximating the average private-pay nursing-home rate). A $100,000 gift becomes roughly an 8-to-12 month penalty depending on the divisor. The clock on the penalty does not start until your parent is otherwise eligible— meaning they’ve spent down to $2,000 and are receiving (or have applied for) covered services. So the penalty hits exactly when the family needs Medicaid most.4

The three MCOs and how to choose

Once your parent is approved for CHOICES, they pick one of three statewide MCOs:

The MCOs are paid a per-member-per-month capitation by TennCare and have meaningful discretion in how they coordinate services, which care managers they assign, and how they authorize specific services. Switching MCOs is allowed at annual review or under qualifying circumstances. For most families, the most important MCO factors are: which one has contracts with your parent’s preferred nursing facility or home-care agency, and which one has the strongest care managers in your county.

The community-spouse situation

If one spouse needs care and the other doesn’t, the rules get more favorable. The well spouse (the “community spouse”) keeps:

Most one-spouse-needs-care situations can be planned to a non-catastrophic outcome with 12–24 months of lead time. Talk to a Tennessee elder-law attorney before doing anything — DIY in this scenario is where we’ve seen the most expensive mistakes.

What to do this month

For the broader context on Medicaid eligibility nationally, see our Medicaid pillar overview. For the Tennessee-specific legal and estate-planning side, see Legal & Financial in Tennessee.