Medicare vs Medicaid in Tennessee: TennCare Difference Explained

Medicare and TennCare (Tennessee's Medicaid program) sound almost the same, but they are two different programs with two different rules. Medicare is federal health insurance based on age (65 or older) or qualifying disability, with no income test. TennCare is Tennessee's Medicaid program for people with limited income and assets, and it covers things Medicare does not, especially long-term care. Many Tennessee seniors qualify for both at once, which is called being dual eligible.

Medicare is not income-based. Anyone who paid into Social Security long enough qualifies, regardless of how much they make.

TennCare is a joint federal-state program run by the state. Its income test is strict, but it fills gaps Medicare leaves open. Even seniors who do not qualify for full TennCare can often get help through one of Tennessee's three Medicare Savings Programs, which pay the Medicare Part B premium and, for the most generous of the three, Medicare Part A and Part B cost-sharing as well.

This guide explains how Medicare and TennCare differ, what each one pays for in 2026, who qualifies for both, and how the two programs coordinate when you have both.

In This Guide

• Key Takeaways
• The 30-Second Answer
• What Medicare Is and What It Covers
• What TennCare Is and What It Covers
• Medicare vs Medicaid in Tennessee: Side-by-Side Comparison
• Can You Have Both?
• Tennessee Medicare Savings Programs
• How Medicare and TennCare Coordinate
• Dual-Eligible Special Needs Plans (D-SNPs)
• Who Pays for Long-Term Care
• How to Apply for Each
• Frequently Asked Questions

The 30-Second Answer

A senior who has worked enough quarters under Social Security and is 65 or older qualifies for Medicare. Income does not matter.

A senior who also has limited income and assets may additionally qualify for TennCare (Tennessee Medicaid). The income test is strict; the asset test runs on SSI's resource rules, so not everything a family owns is counted. See TennCare Eligibility & Income Limits for what is excluded.5

TennCare and Medicaid are the same thing. Tennessee gave its Medicaid program a different name in 1994 when it launched its Section 1115 demonstration. Where this guide says "TennCare," it means Tennessee's Medicaid program.

This distinction matters because Medicare alone has gaps: it does not cover long-term custodial care, it has limited dental and vision benefits, and it leaves seniors with copays and deductibles. TennCare fills those gaps for seniors who qualify. Many families do not check their TennCare or Medicare Savings Program eligibility because they assume that being on Medicare rules out Medicaid, which is not the case.

What Medicare Is and What It Covers

Medicare is a federal health insurance program enacted in 1965 and administered by the Centers for Medicare and Medicaid Services (CMS). Eligibility is based on age or disability, not income.

Who qualifies:

• People age 65 or older who are U.S. citizens or have been lawful permanent residents for at least five years
• People under 65 with certain disabilities (after 24 months of receiving Social Security Disability Insurance)
• People of any age with End-Stage Renal Disease (ESRD)
• People of any age with Amyotrophic Lateral Sclerosis (ALS), coverage starts the first month of SSDI

Medicare has four parts:

The big gaps in Medicare that families need to know about:

1. No long-term custodial care. Medicare covers up to 100 days of skilled nursing facility care after a qualifying inpatient hospital stay, which is rehabilitation, not long-term residency. Once a patient transitions from skilled to custodial care (help with bathing, dressing, and eating without an ongoing skilled need), Medicare stops paying. For most families, long-term custodial care is the largest cost Medicare leaves uncovered.
2. No routine dental, hearing, or vision. Original Medicare covers only narrow medical-necessity exceptions. Most MA plans add some dental and vision benefits, but the scope varies significantly by plan.
3. 20% Part B coinsurance with no out-of-pocket cap under Original Medicare. A senior with cancer or kidney disease can run up tens of thousands of dollars in coinsurance with no ceiling. (Medicare Advantage plans cap out-of-pocket costs; Medigap policies fill the coinsurance gap.)1
4. No transportation, no homemaker services, no personal care attendants. Medicare doesn't pay for someone to come help with daily living tasks at home.

These gaps are exactly what TennCare fills for those who qualify.

What TennCare Is and What It Covers

TennCare is Tennessee's Medicaid program, operating under a federal §1115 demonstration waiver: CMS approved TennCare III (Project Number 11-W-00369/4) effective January 8, 2021 through December 31, 2030.6 TennCare covers approximately 1.4 million Tennesseans.7 Coverage is delivered through managed care. Three health plans are open to member selection: BlueCare, UnitedHealthcare Community Plan, and Wellpoint (formerly Amerigroup). TennCare's health-plan tables list a fourth, TennCare Select, which is not open to voluntary selection and is assigned by the Bureau to specific populations (mainly children, plus any enrollee living where no MCO has capacity).2,3

Who qualifies (for Aged, Blind, and Disabled adults age 65 and older in 2026):

• Income: generally at or below 100% of the Supplemental Security Income (SSI) Federal Benefit Rate, which is $994 per month for an individual and $1,491 for a couple in 2026, for the standard ABD pathway, with a higher limit for CHOICES institutional and home and community based care (300% of the SSI rate, or $2,982 per month for an individual in 2026)5,8
• Assets: $2,000 for an individual and $3,000 for a couple, the SSI resource limits, which apply because this pathway runs on SSI rules and Tennessee is a §1634 state (Social Security, not TennCare, makes the Medicaid determination for an SSI recipient)5
• Medicare beneficiaries can qualify for full TennCare on top of Medicare if they meet the income and asset tests; this is the full-benefit dual pathway

What TennCare covers (high level, see TennCare Covered Services for the comprehensive catalog):

• All federally-mandatory Medicaid services, inpatient hospital, outpatient, physician, lab/X-ray, family planning, nursing facility, home health, transportation
• Comprehensive prescription drug coverage through OptumRx, with $1.50 generic / $3.00 brand-name copays for adults who are not in a nursing home, an HCBS waiver, or an ICF-MR (those members pay nothing). The 5-prescription-per-month adult cap was eliminated effective July 1, 2025, though the 2-brand-name-prescription-per-month limit remains.9
• Comprehensive adult dental added 1/1/2023, at no cost to the member, administered by dental benefits manager Renaissance9
• Behavioral health and substance use disorder services, fully integrated with the medical benefit; no separate carve-out
• Vision, limited for adults to medical evaluation and management of abnormal conditions and disorders of the eye, plus the first pair of glasses or contact lenses after cataract surgery; pediatric EPSDT comprehensive9
• Long-term services and supports through CHOICES, nursing facility (Group 1), HCBS in-home or assisted living (Group 2), at-risk supports (Group 3)
• Non-emergency medical transportation (NEMT), broker-arranged through Verida or Tennessee Carriers depending on MCO
• Hospice, durable medical equipment, physical/occupational/speech therapy, podiatry, chiropractic as medically necessary

Importantly for dual-eligibles: TennCare also pays the cost-sharing for Medicare services (Part A and Part B deductibles and coinsurance) for full-benefit duals and QMBs. That's how the two programs coordinate.4

Medicare vs Medicaid in Tennessee: Side-by-Side Comparison

The table below sets the two programs against each other on the points that matter most to a Tennessee family: who runs each one, whether there is an income or asset test, the standard Part B premium of $202.90 per month in 2026, the ceiling of $9,250 that a Medicare Advantage plan's in-network out-of-pocket maximum may not exceed, and TennCare's $1.50 generic / $3.00 brand-name drug copays (which do not apply at all to members in a nursing home, an HCBS waiver, or an ICF-MR, and TennCare Medicaid adults pay $0 in non-pharmacy copays).1,9

Can You Have Both?

Yes. A Tennessee senior who qualifies for both Medicare and TennCare at the same time is dual eligible. Dual eligibility has tiers:

Full-benefit duals (Medicare + full TennCare). These members get all Medicare benefits as their primary insurance, with TennCare adding (a) cost-sharing protection on Medicare services, (b) coverage of the limited set of drugs Medicare Part D excludes (Part D remains the primary drug payer for full-benefit duals), and (c) all the TennCare-only benefits (dental, non-emergency medical transportation, long-term services and supports, behavioral health, and limited adult vision). This is the strongest dual-eligible status financially.9

QMB Plus / SLMB Plus duals. Members who qualify for both an MSP (paying Medicare premiums and possibly cost-sharing) AND full TennCare. Functionally identical to full-benefit duals.

Partial duals (MSP only). Members whose income is too high for full TennCare but low enough to qualify for one of the three MSPs (QMB, SLMB, QI). They get Medicare cost-sharing or premium help only, with no TennCare benefits beyond the MSP. A QMB enrollee still saves the $202.90 Part B premium plus all Part A and Part B coinsurance and deductibles.4

A common reason families miss dual eligibility is the assumption that being on Medicare and over 65 rules out Medicaid. The two programs use different eligibility tests, and having Medicare does not disqualify a senior from TennCare or an MSP. A Tennessee senior whose monthly income is at or below the QI limit of $1,816 for an individual or $2,455 for a couple in 2026 should check for an MSP or full-TennCare pathway.4

Tennessee Medicare Savings Programs

A Medicare beneficiary whose income is too high for full TennCare but still limited may qualify for a Medicare Savings Program, which sharply reduces Medicare costs. Federal law defines four MSPs, and TennCare's policy manual carries a chapter for each of the three a senior on Medicare uses: QMB (120.010), SLMB (120.015), and QI1 (120.020). The fourth, QDWI, pays the Part A premium for certain working people with disabilities who lost premium-free Part A.4 Those Aged, Blind and Disabled manual chapters apply the federal income and resource standards to all three, which is why the limits below are the federal 2026 figures. Federal rules do permit a state to effectively raise those limits by disregarding certain income or resources; Tennessee's manuals state the federal standards. For the program-by-program detail, including worked income examples and the federal billing protections, see the Tennessee Medicare Savings Programs: Complete 2026 Guide.4

2026 resource limit for all three MSPs: $9,950 individual / $14,910 couple.4 These are not the same as the Part D Extra Help (Low-Income Subsidy) resource limits, which are higher: $16,590 individual / $33,100 for a married couple in 2026, rising to $18,090 / $36,100 for people who tell Social Security they expect to use some resources for burial expenses. So a Tennessee senior whose savings put them over the MSP limit may still qualify for Extra Help on their drug costs.10,1

Important practical points:

• MSP enrollees don't get TennCare medical benefits unless they also qualify for full TennCare separately (e.g., based on age 65+ ABD eligibility plus the income/asset tests).
• QMB has cost-sharing protection, once enrolled, providers cannot bill the QMB enrollee for Medicare Part A and Part B deductibles or coinsurance. Federal law (Social Security Act §§ 1902(n)(3)(B), 1902(n)(3)(C), 1905(p)(3), 1866(a)(1)(A), and 1848(g)(3)(A)) prohibits it, and the prohibition binds all Original Medicare and Medicare Advantage providers and suppliers, not only those that accept Medicaid. If a QMB enrollee gets a Part A or Part B coinsurance bill from a Medicare provider, the bill is improper.4
• Part D Extra Help is automatic for QMB, SLMB, and QI enrollees, because federal rules deem those three groups full-subsidy eligible (QDWI, the fourth MSP, does not confer Extra Help).4 Enrollees pay $0 Part D premium (for benchmark plans), $0 deductible, and copays of no more than $5.10 per generic / $12.65 per brand-name drug in 2026, then $0 once out-of-pocket drug costs reach the $2,100 catastrophic threshold. For the full LIS interplay, the QMB billing prohibition under Social Security Act § 1902(n)(3)(B), the QMB-Plus and SLMB-Plus dual-eligible categories, the Part B Special Enrollment Period for newly determined MSP enrollees, and three worked examples, see Tennessee Medicare Savings Programs: Complete 2026 Guide.4,10

How to apply. Tennessee MSP applications run through TennCare Connect at tenncareconnect.tn.gov, 1-855-259-0701, or by mail to P.O. Box 305240, Nashville, TN 37230-5240; the Social Security Administration also takes MSP applications and forwards them to TennCare, and a Part D Extra Help application starts an MSP application too. There is no separate paper MSP form. The full intake walkthrough is in the Tennessee Medicare Savings Programs deep guide.4

How Medicare and TennCare Coordinate When You Have Both

For a full-benefit dual, the two programs work together, but in a specific order:

1. Medicare pays first for any Medicare-covered service (inpatient hospital, physician visit, durable medical equipment, etc.). Medicare's reimbursement to the provider is the primary payment.
2. TennCare pays second to cover the Part A deductible ($1,736 per benefit period in 2026) and Part B coinsurance (20% on most services). For QMB-eligible duals, this protection is comprehensive.1
3. TennCare-only benefits (long-term care, NEMT, dental, etc.) are paid entirely by TennCare with no Medicare involvement.
4. Prescription drugs. Dual eligibles automatically get the Part D Low-Income Subsidy (Extra Help). Part D is the primary drug payer: for full-benefit duals, Medicaid may not pay for Part D-covered drugs or any cost-sharing on them (42 U.S.C. § 1396u-5(d)(1)), though the state may elect to cover drugs Part D excludes. Extra Help wipes out the Part D premium up to the benchmark and the deductible; Part D coinsurance drops to zero only for duals who are institutionalized (or who would be but for HCBS), so other full-benefit duals still owe nominal per-prescription copays.11

Practical tip: Dual eligibles should make sure their providers know they have both programs. Hospital and physician billing systems sometimes try to bill the patient for Medicare cost-sharing without checking for QMB or full-Medicaid status. If a dual gets a bill they shouldn't, the answer is to contact the provider with proof of QMB or TennCare enrollment and request a re-bill to TennCare.

Dual-Eligible Special Needs Plans (D-SNPs)

A D-SNP is a specialized Medicare Advantage plan designed for dual-eligible members. Like any Special Needs Plan it is an HMO or PPO covering the same Part A and Part B benefits as other Medicare Advantage plans, and it must include Part D drug coverage. Tennessee has two kinds: a Fully Integrated Dual Eligible (FIDE) SNP, which manages Medicare and Medicaid benefits under one plan and is the most integrated option, and a Coordination-Only D-SNP, which covers the member's Medicare benefits and must work with the TennCare MCOs to manage the Medicaid side. For 2026, Tennessee's D-SNPs are offered by the same three companies that operate the TennCare health plans:12

• BlueCross BlueShield of Tennessee, the BlueCare Plus plans
• UnitedHealthcare, the UHC Dual Complete plans
• Wellpoint (formerly known as Amerigroup)

D-SNPs are not mandatory for dual-eligibles, members can stay on Original Medicare plus their TennCare MCO if they prefer. The advantage of a D-SNP is integrated care management; the disadvantage is the narrower provider network compared to Original Medicare. The regular window to join or switch runs October 15 through December 7 each year, with changes taking effect January 1. Someone already in a Medicare Advantage plan (a D-SNP is one) gets a second window, January 1 through March 31, to make one change, and a Special Enrollment Period can open outside both windows after a qualifying life event such as a move or the loss of other creditable coverage.13

Who Pays for Long-Term Care in Tennessee

This is the question that drives most dual-eligibility research. The short answer:

Medicare: pays for up to 100 days of skilled nursing facility care after a qualifying 3-day inpatient hospital stay. Days 1-20 fully covered; days 21-100 the patient pays $217/day coinsurance in 2026. Medicare does NOT pay for long-term custodial nursing-facility care or assisted living. Two details on the 3-day rule are worth knowing before a discharge: time spent under observation or in the emergency room before formal admission does not count toward the 3 days, even overnight; and the 3-day minimum may be waived if the doctor participates in an Accountable Care Organization approved for a SNF 3-Day Rule Waiver, or if the patient is in a Medicare Advantage plan that waives it. Ask the hospital whether the stay is inpatient or observation.1

TennCare CHOICES: pays for long-term care in three setting types:

• CHOICES Group 1, nursing facility (full coverage; the member pays a calculated patient-liability amount based on income above the personal needs allowance)
• CHOICES Group 2, home and community based services in the community or in an assisted living facility, subject to an individual cost-neutrality cap of $107,627.55 per year for 2026 (room and board in assisted living is not covered)14
• CHOICES Group 3, at-risk in-home supports, subject to an annual HCBS expenditure cap of $18,000, which excludes the cost of minor home modifications15

Groups 2 and 3 are capacity-limited, which matters when you are planning. TennCare sets an enrollment target for each (the maximum number of people who may be enrolled at any one time), and Group 2's is 12,500. Once the target is reached, qualified applicants are placed on a waiting list for Group 2 rather than enrolled, unless they satisfy the rule's reserve-capacity or specified exception criteria. For Group 3, TennCare publishes an enrollment target of 1,750 for non-SSI recipients, effective October 1, 2022 and based on current appropriations. Group 1, nursing facility care, carries no such target.15

What happens to the house. For CHOICES and institutional Medicaid, TennCare excludes the home while it is the principal place of residence of the applicant, their spouse, or a dependent relative, or where intent to return is established. There is a ceiling on that protection: an institutional individual is ineligible for payment of LTSS (CHOICES) when home equity exceeds $752,000. Where one spouse stays in the community, TennCare's resource-assessment policy sets that spouse's resource allowance at half the couple's countable resources, no less than $32,532 and no more than $162,660 as of January 2026, with a maximum monthly maintenance needs allowance of $4,066.50.8

For full-benefit duals receiving long-term care, Medicare and TennCare CHOICES coordinate this way: Medicare pays for skilled medical services (physician visits, hospitalizations, prescriptions, the first 100 days of skilled rehab in a nursing facility); CHOICES pays for the long-term custodial care after Medicare's coverage ends, plus all the medical cost-sharing along the way.

Long-Term Care insurance is the third payer in this picture: a private LTCI policy can cover long-term care costs that Medicare won't, and Tennessee's Long-Term Care Partnership program lets policyholders shelter assets equal to LTCI benefits paid before applying for TennCare. For families with assets above the TennCare threshold, LTCI is one of the few non-trust strategies for protecting wealth from a long nursing-facility stay.

For the deeper detail on CHOICES eligibility, patient liability, and qualified income trusts, see Long-Term Care and Nursing Home Coverage in Tennessee.

How to Apply for Each

Medicare:

• Initial Enrollment Period: the seven-month window around your 65th birthday (3 months before, the birth month, and 3 months after). Most people are auto-enrolled in Parts A and B if they're already drawing Social Security at 65; otherwise sign up via ssa.gov/medicare or visit a local Social Security office.
• Part D drug plan or MA plan: select during the Annual Election Period (October 15 - December 7) for January 1 effective date. Compare plans at medicare.gov/plan-compare.
• General Enrollment Period: January 1 - March 31 each year for those who missed initial enrollment. Late-enrollment penalties may apply.

TennCare:

• Online: tenncareconnect.tn.gov, the primary application channel
• Phone: 1-855-259-0701 (TennCare Connect); Tennessee Relay Service 800-848-02987
• In person: your local Tennessee Department of Health office provides application help; for long-term-care help, call the Area Agency on Aging and Disability at 1-866-836-6678, and a representative will come to the home of an applicant with a disability7
• By mail: request an application by phone; submit completed forms to the address listed
• For LTSS / CHOICES applications: TennCare initiates a separate financial review plus an Acuity Care Plan / level of care assessment. The PAE (Pre-Admission Evaluation) form is used to document level of care.

For comprehensive walk-through of the TennCare application, see How to Apply for TennCare in Tennessee.

Learn More

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The information on Brevy.com is for educational purposes only and is not a substitute for professional legal, financial, or medical advice. Rules vary by state and program and change frequently. Always verify with the relevant agency or a qualified professional. Brevy is not a law firm, financial advisor, or healthcare provider.