Tennessee Medicaid Planning: Protect Your Home Now

Why Medicaid Planning Matters in Tennessee

Long-term care costs can quickly overwhelm savings. TennCare (Tennessee’s Medicaid program) may cover nursing facility services and certain home- and community-based services if you meet strict financial, medical, and program requirements. See TennCare’s overview of Long-Term Services & Supports (LTSS) for basics on who may qualify and how benefits are delivered. TennCare LTSS overview.

Medicaid vs. Medicare: Know the Difference

Medicare is health insurance for older adults and some individuals with disabilities; it offers limited coverage for skilled nursing facility care and does not pay for extended custodial nursing home stays. Medicaid is a means-tested program that can cover long-term care if income, assets, medical need, and other state-specific criteria are met.

Tennessee Home Exemption Basics

For Medicaid eligibility, a Tennessee applicant’s primary residence may be treated as an excluded (non-countable) resource in certain circumstances. Common factors include the applicant’s intent to return home and the presence of a spouse or certain relatives residing in the home. Federal law also imposes a home equity limit, and states implement these rules through their eligibility policies. See federal Medicaid provisions on assets, home equity, and trusts at 42 U.S.C. § 1396p, and general Medicaid eligibility regulations at 42 C.F.R. Part 435. Because specific limits and tests can change and are fact-dependent, confirm current TennCare policy before acting.

The Lookback Concept and Transfer Penalties

For long-term care Medicaid, states review asset transfers made during a 60-month lookback period. Gifts or below–fair-market-value transfers during this period can create a penalty period that delays eligibility. The penalty duration is typically calculated by dividing the uncompensated transfer amount by the state’s average private-pay nursing facility rate. See federal transfer-of-assets rules and exceptions at 42 U.S.C. § 1396p, and Tennessee’s implementing rules and policy guidance (including LTSS program rules) at Tennessee Rules & Regs 1200-13-20. Timing, documentation, and proper structuring are critical.

Estate Recovery in Tennessee

After a Medicaid recipient’s death, Tennessee participates in estate recovery to recoup certain benefits paid. In general, TennCare seeks recovery primarily from the decedent’s probate estate and recognizes important exceptions (for example, when a spouse survives, or in cases involving a minor or disabled child), and it may consider hardship. See TennCare’s Estate Recovery page and federal guidance at 42 C.F.R. Part 433, Subpart E. Whether and how recovery applies depends on the assets involved and how they pass at death.

Common Strategies to Help Protect the Home

• Spousal protections: Federal and state rules provide allowances for a community (non-applicant) spouse that can help preserve the home and other resources when one spouse needs care. See 42 U.S.C. § 1396r-5.
• Caregiver child exception: A transfer of the home to a child who provided qualifying care that delayed institutionalization may be permissible if strict criteria are met. See exceptions in 42 U.S.C. § 1396p.
• Sibling with equity interest: A transfer to a sibling with an ownership interest who lived in the home for a required period may be allowed under specific conditions. See 42 U.S.C. § 1396p.
• Intent-to-return documentation: Maintaining credible evidence of intent to return (for example, keeping the home, mail, and records aligned with that intent) can support the home’s excluded status during temporary institutionalization.
• Care agreements: Written personal services or caregiver contracts, properly documented and paid at fair market value, can help avoid the appearance of disqualifying gifts.
• Advance planning with trusts: Certain irrevocable trusts may provide protection if established and funded sufficiently in advance; however, transfers to and from trusts are closely regulated. See trust provisions in 42 U.S.C. § 1396p.
• Property titling and beneficiary designations: How the home and other assets are titled and how they pass at death can affect eligibility and the scope of estate recovery.

Crisis Planning vs. Early Planning

Early planning generally offers more options and flexibility. Even if care is needed soon, crisis planning may still reduce exposure using permissible spend-downs, exemptions, or spousal rules. Do not assume it is too late—seek advice promptly tailored to Tennessee’s rules and your facts.

Documentation Tips

Keep thorough records: deeds and title history, tax assessments, proof of residence, caregiving logs, medical assessments, care contracts, receipts for payments, and correspondence with TennCare or your managed care organization. Accurate documentation helps during eligibility review and any later estate recovery inquiry.

How an Attorney Can Help

A Tennessee elder law attorney can evaluate your assets, income, and care needs; explain TennCare eligibility; structure compliant transfers and care agreements; coordinate with healthcare providers; and guide you through applications and appeals. Advice tailored to your situation can help protect the family home while pursuing needed benefits.

Next Steps

• Take stock of your finances and property, including the home’s title and equity.
• Discuss care needs and timelines with family and healthcare providers.
• Avoid gifts or transfers without legal guidance.
• Schedule a consultation to review options specific to your circumstances.

FAQs

Is my Tennessee home always exempt for Medicaid eligibility?

No. It can be excluded in certain cases, such as when a spouse or qualifying relative lives there or when you express intent to return, and subject to the home equity limit. Confirm current TennCare policy for specifics.

What happens if I gifted assets within the last five years?

Gifts or below–fair-market-value transfers during the 60-month lookback can trigger a penalty period delaying eligibility. There are limited exceptions; timing and documentation matter.

Will TennCare take my house when I die?

TennCare may seek estate recovery after death, subject to exceptions (for example, surviving spouse) and hardship provisions. How assets pass at death can affect recovery.

Do irrevocable trusts always protect the home?

Not always. Transfers to trusts are regulated, and poor drafting or timing can cause penalties. Get Tennessee-specific legal advice before funding a trust.

When should I start planning?

As early as possible. Early planning preserves more options, but even crisis planning can help reduce exposure.

How do I get help now?

Contact us to discuss your situation and next steps.

Key Sources

• Tennessee TennCare – Long-Term Services & Supports
• Tennessee Rules & Regs – LTSS Program Rules (1200-13-20)
• Tennessee TennCare – Estate Recovery
• 42 C.F.R. Part 433, Subpart E – Estate Recoveries
• 42 C.F.R. Part 435 – Medicaid Eligibility
• 42 U.S.C. § 1396p – Asset Transfers, Estate Recovery, Trusts
• 42 U.S.C. § 1396r-5 – Spousal Impoverishment Protections

Disclaimer

This blog provides general information about Tennessee Medicaid (TennCare) planning and is not legal advice. Laws and policies change, and outcomes depend on your specific facts. Consult a licensed Tennessee attorney for guidance.