Tennessee Medicaid Spousal Impoverishment (2026)

When one spouse needs nursing home or HCBS-waiver Medicaid in Tennessee, federal spousal impoverishment rules stop the program from leaving the at-home spouse with nothing. Enacted by Congress in 1988, they are the single most consequential body of Medicaid law for married couples. Used correctly, they protect the community spouse's home, a meaningful portion of countable assets, and her own income. This guide covers the federal framework, the 2026 dollar amounts, TennCare's implementation, the snapshot mechanic, the Income-First fair-hearing path, the Single Fixed Annuity model, and the controlling Sixth Circuit precedent Hughes v. McCarthy that shapes community-spouse annuity strategy in Tennessee.

This guide is not legal advice. For couples with substantial countable assets, working with a Tennessee-licensed elder law attorney (preferably a NAELA member) is essential.

60-Second Version

If you have time for only one paragraph, here it is. Tennessee follows the federal spousal impoverishment framework at 42 USC § 1396r-5. When the institutionalized spouse enters a nursing facility (or is approved for CHOICES Group 2/3 HCBS), TennCare takes a snapshot of the couple's countable resources on the date of first continuous institutionalization. The community spouse keeps the Community Spouse Resource Maintenance Allowance (CSRMA), equal to one-half of countable resources, with a 2026 floor of $32,532 and a ceiling of $162,660. Anything above the CSRMA must be spent down to the institutionalized spouse's $2,000 individual asset limit. The community spouse keeps all of her own income under the federal "name on the check" rule, and may receive a Community Spouse Income Maintenance Allowance (CSIMA) transferred from the institutionalized spouse's income to bring her up to the Minimum Monthly Maintenance Needs Allowance (MMMNA) of $2,643.75/month (effective 7/1/2025–6/30/2026), or up to a maximum of $4,066.50/month with proof of excess shelter costs. Tennessee follows the Income-First rule under DRA-2005 for fair-hearing CSRMA expansions and uses the Single Fixed Annuity model to evaluate hardship requests. For couples whose institutionalized spouse is over the $2,982 monthly income cap, a Qualified Income Trust is needed in addition to the spousal-impoverishment protections. The home (up to $752,000 in equity) is exempt during the institutionalized spouse's lifetime. The Sixth Circuit's decision in Hughes v. McCarthy, 734 F.3d 473 (6th Cir. 2013), controls community-spouse annuity strategy and is binding on TennCare.

The Four-Mechanism Framework

Spousal impoverishment is not one rule. It is four rules working together, and understanding them as a system is the difference between getting protection right and leaving money on the table.

1. The Resource Assessment ("Snapshot")

The snapshot is the first event in the spousal impoverishment workflow. Per 42 USC § 1396r-5(c)(1)(B) and TennCare ABD Eligibility Manual § 125.015 § 2(a), the snapshot fixes the couple's countable resources as of:

• For nursing facility or hospital admissions: the date of admission (the first day of a continuous period of confinement of 30 days or more).
• For HCBS waivers (CHOICES Groups 2 and 3, ECF CHOICES, PACE): the effective date of an approved Pre-Admission Evaluation (PAE). Spousal impoverishment protections apply to PACE under 42 USC § 1396r-5(h)(1)(A), which expressly includes PACE among the programs that trigger the framework.
• For HCBS applicants who file an application before PAE approval: the date of the application, provided the PAE is approved within 90 days.

Why does the snapshot date matter so much? Because the CSRMA is calculated from the snapshot, not from current asset values. If the snapshot occurs in March and the couple spends $40,000 on care between March and August, the CSRMA still reflects the March numbers, not August's depleted balance. Conversely, if the institutionalized spouse's IRA grows by $20,000 after the snapshot, that growth does not increase the CSRMA. The snapshot is frozen.

The snapshot can be done before a TennCare application is filed. TennCare ABD Manual § 125.015 § 2(c) explicitly invites couples to request a stand-alone resource assessment: "Generally, it may be to each spouse's benefit to have the assessment done at the time of admission, even if no concurrent application for TennCare Medicaid is made, since the availability of documentation at this time may result in the protection of a greater amount of assets for the community spouse." This is one of the most under-used tools in Tennessee. Long-term care facilities are required by federal law (42 USC § 1396r(c)(2)(F)) to inform residents and spouses of the right to request an assessment.

2. The Community Spouse Resource Allowance (CSRA / CSRMA)

The CSRA, TennCare calls it the CSRMA (Community Spouse Resource Maintenance Allowance), is the dollar amount of countable resources the community spouse keeps. Tennessee follows the standard federal one-half formula at 42 USC § 1396r-5(f) and TennCare ABD Manual § 125.015 § 5(a)(i). The community spouse keeps the greater of:

1. One-half of countable resources measured at the snapshot date, capped at the federal maximum and floored at the federal minimum, OR
2. A court-ordered amount (rare but binding), OR
3. An amount determined by an appeals officer for hardship.

For 2026, the federal minimum CSRMA is $32,532 and the maximum is $162,660 (CMS Spousal Impoverishment CIB dated December 9, 2025; TennCare ABD Manual § 125.015 § 5(a)(i)). These numbers are indexed annually each January based on CPI-U.

The institutionalized spouse keeps $2,000 under the standard ABD asset limit. Everything between the CSRMA and $2,000 must be spent down before the institutionalized spouse becomes resource-eligible. "Spend down" means medically necessary expenses, qualified estate-planning expenditures (within DRA-2005 limits), conversion to exempt assets, or transfer-of-asset penalty windows already cleared. Spend-down does not mean gifting, gifts trigger the 60-month look-back and create penalty periods.

3. The Minimum Monthly Maintenance Needs Allowance (MMMNA)

The MMMNA is the income floor for the community spouse. Per 42 USC § 1396r-5(d)(3) and TennCare ABD Manual § 125.020 § 3(d)(ii)(1)(a), the 2026 MMMNA in Tennessee is:

• $2,643.75/month minimum (also called the SMA, Standard Maintenance Amount), equal to 150% of the FPL for a household of 2, effective 7/1/2025–6/30/2026.
• $4,066.50/month maximum, effective 1/1/2026–12/31/2026.

The minimum applies regardless of expenses. The maximum is reached only by demonstrating excess shelter costs above the Standard Housing Allowance (SHA) of $793.13/month (equal to 30% of the SMA), or by obtaining a CSRMA-expansion order through fair hearing or court order. Most community spouses in Tennessee fall between the floor and ceiling.

4. The Community Spouse Income Maintenance Allowance (CSIMA / MMNA)

The CSIMA, TennCare calls it the CSIMA (Community Spouse Income Maintenance Allowance), is the deduction taken from the institutionalized spouse's monthly income that flows to the community spouse to bring her up to the MMMNA. Mechanics under 42 USC § 1396r-5(d)(1)(B) and TennCare ABD Manual § 125.020 § 3(d):

1. Compute the community spouse's Maintenance Needs Standard = SMA + ESA, where ESA (Excess Shelter Allowance) = Rent/Mortgage + Property Taxes + Homeowners Insurance + Standard Utility Allowance ($451/month for TN, effective 10/1/2025–9/30/2026) – Standard Housing Allowance ($793.13/month). If ESA is negative, treat it as zero.
2. Compute Community Spouse Net Income, her own Social Security, pension, wages, etc. (Does NOT include SSI received by community spouse; does NOT include child support paid out by community spouse.)
3. CSIMA = Maintenance Needs Standard – Community Spouse Net Income, capped at the Maximum MMMNA of $4,066.50/month.

The CSIMA flows from the institutionalized spouse's income. If the institutionalized spouse's income is less than the CSIMA needed, no transfer occurs and the community spouse remains short of the MMMNA, at which point the Income-First fair-hearing path may unlock additional resource protection. We cover this below.

The crucial federal rule that protects the community spouse beyond the MMMNA is the "name on the check" doctrine at 42 USC § 1396r-5(b)(2): the community spouse keeps all of her own income, no matter how high. If the community spouse earns $10,000/month from a pension, she keeps every dollar. Only the institutionalized spouse's income flows to the nursing facility (after PNA, premiums, family allowance, CSIMA, and other deductions). Joint income (e.g., a joint bank account from which both spouses draw) is presumptively split 50/50 unless titling proves otherwise.

2026 Dollar Amounts at a Glance

The federal spousal impoverishment numbers operate on a split fiscal calendar that confuses families and case workers alike. Here is the comprehensive table for Tennessee:

The CSRMA min/max are calendar-year (January through December). The MMMNA floor and SHA are federal-fiscal-year (July through June). The SUA is SNAP fiscal year (October through September). Three different cycles. Watch the dates.

Tennessee's Authority, How TennCare Implements

Tennessee has no stand-alone spousal impoverishment statute. (You will see TCA § 71-5-XXX cited online, none of those references are correct as a "spousal impoverishment authority" because no such statute was ever enacted.) Tennessee implements the federal framework through three layers:

Layer 1: TennCare regulations

The binding regulation is Tenn. Comp. R. & Regs. Chapter 1200-13-20 ("Aged, Blind and Disabled Categories"), promulgated by the TennCare Bureau under rulemaking authority at TCA §§ 4-5-202, 4-5-208, 71-5-105, 71-5-106, 71-5-109 to 71-5-112, 71-5-117, and 71-5-164. Rule 1200-13-20-.08 contains the spousal impoverishment provisions. The older Department of Human Services rule at Tenn. Comp. R. & Regs. 1240-03-03-.03, while still cited for legacy categories, has been superseded for TennCare LTSS spousal impoverishment purposes by 1200-13-20.

Layer 2: TennCare ABD Eligibility Policy Manual

The binding internal-guidance document is the TennCare Aged, Blind and Disabled Eligibility Policy Manual. Three sections govern spousal impoverishment:

• § 125.015, Resource Assessment (last revised January 5, 2026), sets out the CSRMA mechanics, snapshot procedure, transfer-of-resources timing, and fair-hearing process.
• § 125.020, Post-Eligibility Treatment of Income (last revised October 1, 2025), sets out the CSIMA and MMMNA mechanics, including the SUA/BUA/SHA worked example for the case study TennCare uses to train eligibility specialists.
• § 125.010, Transfer of Assets and Penalty Periods, governs the look-back interaction with annuities, promissory notes, and intra-couple transfers.

Layer 3: TennCare CHOICES §1115 Demonstration

Because Tennessee's LTSS programs operate under a §1115(a) demonstration (TennCare III, CMS-approved through 12/31/2030), additional special-terms-and-conditions apply to CHOICES Group 2/3, ECF CHOICES, and BlueCare Plus FIDE-SNP enrollees. The §1115 STC do not change the core spousal impoverishment framework, that remains 42 USC § 1396r-5, but they govern the program-specific mechanics for HCBS members.

Tennessee's terminology, CSRMA, CSIMA, SMA, ESA, SHA

When you read the TennCare manual, you will see acronyms that don't match the federal terminology. Translation table:

The concepts are identical; only the labels differ. We use both throughout this guide.

The Snapshot in Detail

The mechanics of the snapshot deserve their own section because they trip up roughly half of all DIY applications.

What counts as "first continuous period of confinement"?

Per TennCare ABD Manual § 125.015 § 2(a), "first continuous period of confinement" is the first day of a continuous stay of at least 30 days in a hospital, nursing facility, or HCBS-equivalent setting. If a person enters a hospital on March 5, transfers to a nursing facility on March 18, and remains continuously confined through April 15, the snapshot date is March 5, even though the formal nursing facility admission was March 18.

For HCBS, the snapshot is the effective date of the approved PAE. Because PAEs are sometimes approved retroactively to the date of application, the snapshot can effectively pre-date the formal approval.

What gets counted at snapshot?

All countable resources of both spouses, regardless of titling, are included in the snapshot. This includes:

• Checking and savings accounts (joint or individual)
• Certificates of deposit
• Stocks, bonds, mutual funds (both spouses' portfolios)
• IRAs, 401(k)s, 403(b)s, SEP-IRAs, Roth IRAs of both spouses (Tennessee does NOT exempt the community spouse's retirement accounts, Florida does, but TN does not)
• Cash value of life insurance (above $1,500 face value, the cash value counts)
• Real estate other than the home (rental property, vacation home, undeveloped land)
• Investment vehicles (annuities not yet annuitized, brokerage accounts)
• Vehicles in excess of one (one vehicle is exempt regardless of value if used for transportation of either spouse)

What is excluded from the snapshot:

• The home (up to $752,000 in equity, with no cap if a spouse, minor child, or blind/disabled child resides there)
• Household goods and personal effects
• One vehicle of any value
• Pre-paid burial contracts (irrevocable, up to $1,500 face value of standard burial space items unlimited)
• Burial plot
• Property essential to self-support (working farm, business inventory)
• ABLE account assets (up to federal cap, for blind/disabled qualifying individual)

The list of countable vs. exempt is identical to the standard ABD eligibility framework, see Tennessee Medicaid Eligibility & Income Limits for the comprehensive treatment.

Standalone resource assessments

A couple does not need to apply for TennCare to request a snapshot. TennCare ABD Manual § 125.015 § 2(c) invites couples to file an "Assessment Application Only" using TennCare's standard application form, marking the resource-assessment-only box. This locks in the snapshot for future use. Documentation that's hard to recover later (closing statements, brokerage statements, rare-asset valuations) is preserved at its highest-quality moment. Long-term care facilities are required to inform every admitting resident's spouse of this option. Many do not. This is one of the most strategically valuable steps available, and most TN families miss it.

Income-First Rule and the Single Fixed Annuity Model

When the community spouse's combined income (her own + CSIMA) is below the MMMNA, federal law since the Deficit Reduction Act of 2005 (P.L. 109-171) requires Tennessee to follow the Income-First rule before allocating additional resources to the community spouse.

Income-First in plain English

Per 42 USC § 1396r-5(d)(6) and TennCare ABD Manual § 125.015 § 7(c)(i), before TennCare can allocate additional resources to the community spouse to generate income, it must first allocate the maximum available income of the institutionalized spouse to the community spouse. Practically, this means:

1. Compute the community spouse's MMMNA shortfall (the gap between her own income + CSIMA and the SMA + ESA).
2. The institutionalized spouse's full income (less his $70 NF PNA, mandatory payroll deductions, and health insurance premiums) is FIRST diverted to the community spouse to fill the gap.
3. Only if the institutionalized spouse's income, even after maximum allocation, is insufficient does TennCare consider allocating additional resources via fair hearing.

This rule was added by DRA-2005 to close a pre-2006 loophole where some states allowed Resource-First (skipping ahead to allocate additional CSRMA without first redirecting all of the institutionalized spouse's income). All states are now Income-First. Tennessee complies.

The Single Fixed Annuity (SFA) model

When Income-First is exhausted and the community spouse remains below the MMMNA, TennCare ABD Manual § 125.015 § 7(c)(ii) describes the Single Fixed Annuity model TennCare uses to evaluate fair-hearing requests for CSRMA expansion:

1. Compute the income shortfall between the community spouse's net income (plus CSIMA) and the SMA + ESA.
2. Compute the lump sum that, if invested in a single-premium immediate annuity priced to the community spouse's life expectancy under the SSA Period Life Table, would generate exactly enough monthly income to fill that shortfall.
3. If that calculated lump sum exceeds the standard CSRMA, the appeals hearing officer may allocate the difference as additional resources to the community spouse, raising the protected amount above the federal maximum.

A crucial nuance: the community spouse is not required to actually purchase a SPIA under the SFA model. It is a calculation device for CSRMA expansion only (Manual § 125.015 § 7(c)(ii)(3)). If the community spouse later does purchase a SPIA, the SPIA must independently satisfy the DRA-2005 six-requirement test (covered below).

The SFA model is a powerful but seldom-used tool. Couples who think they need it should consult an elder law attorney before requesting a fair hearing, the calculation is technical, and TennCare's published worked examples in the manual are not always intuitive.

Filing a CSRMA fair-hearing appeal

The procedure under Tenn. Comp. R. & Regs. Chapter 1200-13-19 (TennCare appeals, note: NOT 1240-05-03-.03, which is the older DHS rule):

1. File a TennCare Medicaid application. (Standalone resource assessments cannot be appealed under § 125.015 § 7(a), the application creates the right of review.)
2. File a written appeal request within 40 calendar days of the notice of adverse action.
3. Hearing before an Administrative Law Judge through the TennCare Eligibility Appeals Unit.
4. ALJ applies the SFA model and determines whether shortfall justifies CSRMA expansion.
5. Final agency decision is appealable to Davidson County Chancery Court within 60 days under TCA § 4-5-322.

If the appeal is filed within 10 days of the adverse action notice, continued benefits are available pending decision.

Hughes v. McCarthy, The Sixth Circuit Annuity Case

For Tennessee couples considering a community-spouse annuity strategy, the most important case is Hughes v. McCarthy, 734 F.3d 473 (6th Cir. 2013). Because the Sixth Circuit covers Kentucky, Michigan, Ohio, and Tennessee, this published decision is binding on TennCare.

Facts

Holding

The Sixth Circuit reversed. The court held that under 42 USC § 1396p(c)(2)(B)(i), an annuity "for the sole benefit of the individual's spouse" is an unlimited-amount permitted transfer. The annuity does NOT additionally need to satisfy the SPIA requirements at 42 USC § 1396p(c)(1)(F), the two provisions are alternative paths, not cumulative. The court joined the Second Circuit (Lopes), Eighth Circuit (Geston), and Tenth Circuit (Morris) on this point.

Practical import for Tennessee

After Hughes, a community spouse in Tennessee can purchase a DRA-compliant SPIA before the institutionalized spouse is found Medicaid-eligible, even using IRA funds, and the purchase is not a penalizable transfer. The annuity converts excess countable resources (above the CSRMA + $2,000) into an income stream that belongs to the community spouse alone.

However, TennCare's ABD Manual § 125.010 still requires SPIAs to comply with the DRA-2005 six-requirement framework. Best practice in Tennessee: structure the SPIA to satisfy BOTH 42 USC § 1396p(c)(1)(F) (state remainder beneficiary) AND 42 USC § 1396p(c)(2)(B)(i) (sole benefit). Belt and suspenders. Most TN elder law attorneys structure with the State of Tennessee as primary remainder beneficiary regardless of Hughes, because TennCare reviewers are sometimes aggressive and the cost of failed compliance is months of denied eligibility.

The DRA-2005 SPIA Six Requirements

Per 42 USC § 1396p(c)(1)(F)–(G):

1. Irrevocable, once purchased, the annuity cannot be modified, surrendered, or revoked.
2. Non-assignable, the community spouse cannot transfer or sell the income stream.
3. Actuarially sound, the term must not exceed the community spouse's life expectancy under the SSA Period Life Table.
4. Equal periodic payments, monthly payments must be equal throughout the term, with no balloons or deferrals.
5. State of Tennessee as primary remainder beneficiary, up to total Medicaid benefits paid on behalf of either spouse. Second-position beneficiary status is permitted only behind: (a) the institutionalized spouse, (b) a minor or disabled child, or (c) a trust for the sole benefit of a minor or disabled child.
6. Issued by a licensed insurer, must be a true commercial annuity from a state-licensed life insurance company.

Failure on any single requirement recharacterizes the annuity as an uncompensated transfer, triggering a look-back penalty.

Sister-circuit persuasive authority

While Hughes is binding on Tennessee, three other circuits have ruled the same way and are frequently cited in TN elder law briefs:

• Lopes v. Department of Social Services, 696 F.3d 180 (2d Cir. 2012), pre-Hughes foundational case holding income from a community-spouse SPIA is not a countable resource.
• Geston v. Anderson, 729 F.3d 1077 (8th Cir. 2013), followed Lopes; the Sixth Circuit cited Geston favorably in Hughes.
• Morris v. Oklahoma Department of Human Services, 685 F.3d 925 (10th Cir. 2012), same outcome.
• Zahner v. Mackereth, 802 F.3d 401 (3d Cir. 2015), short-term SPIAs (e.g., 12-month term for an 81-year-old) acceptable under DRA actuarial soundness if matched to the lender's life expectancy.

CSRMA Expansion via Court Order

In addition to the SFA-model fair-hearing path, Tennessee couples have a second route to expand the CSRMA above the federal maximum: court order for spousal support under TCA Title 36 (family law).

A Tennessee Chancery or Circuit Court can issue an order requiring the institutionalized spouse to pay spousal support to the community spouse. Per TennCare ABD Manual § 125.015 § 5(a)(xiii) and § 7(b)(iii), TennCare must honor a court-ordered support amount even when it exceeds the federal CSRMA maximum.

Practical mechanics:

1. File a separate maintenance/support action in TN family court (TCA § 36-3-101 et seq.).
2. Litigate or settle for a support order specifying the dollar amount the institutionalized spouse owes the community spouse.
3. Present the order to TennCare during the resource assessment.

The order must be a real adversarial proceeding, collusive orders entered solely to defeat Medicaid can be challenged. Coordination between an elder law attorney and a family law attorney is essential. This is the rarely-used "ace" for very high-asset couples where the federal max CSRMA of $162,660 is grossly insufficient to cover the community spouse's reasonable maintenance needs.

Worked Examples

Example 1: $300,000 in countable assets, the median nursing home admission

The Williamses have been married 47 years. Mrs. Williams is admitted to a Knoxville nursing facility on January 15, 2026 with advanced Alzheimer's. Mr. Williams continues to live in their Maryville home. Their countable resources at snapshot:

• Joint checking: $12,000
• Joint savings: $48,000
• Mr. Williams's IRA: $145,000
• Mrs. Williams's IRA: $80,000
• Joint brokerage account: $15,000
• Total countable: $300,000

Their home (value $385,000, equity $310,000) is exempt during Mr. Williams's lifetime. One vehicle is exempt.

CSRMA calculation:

• One-half of $300,000 = $150,000
• 2026 federal max = $162,660
• 2026 federal min = $32,532
• $150,000 is between min and max, so CSRMA = $150,000

Mr. Williams keeps: $150,000. Mrs. Williams's share: $300,000 – $150,000 = $150,000. Spend-down required: $150,000 – $2,000 = $148,000 before Mrs. Williams becomes resource-eligible.

The spend-down can include private-pay nursing home costs, qualifying medical expenses, prepaid burial, home repairs (the home is Mr. Williams's residence and its maintenance is a reasonable expense), and a DRA-compliant community-spouse SPIA if the family wishes to convert excess to an income stream.

Example 2: $80,000 in countable assets, the small-estate case

The Hardins are 78 and 76, married 52 years. Mr. Hardin enters Vanderbilt Stallworth Rehab on March 1, 2026 after a stroke. He transitions to a Nashville nursing facility on March 22, the snapshot date is March 1 (first continuous confinement of 30+ days). Their countable assets:

• Joint savings: $42,000
• Mr. Hardin's IRA: $30,000
• Mrs. Hardin's small CD: $8,000
• Total countable: $80,000

CSRMA calculation:

• One-half of $80,000 = $40,000
• 2026 federal min = $32,532
• 2026 federal max = $162,660
• $40,000 is between min and max, so CSRMA = $40,000

Mrs. Hardin keeps: $40,000. Mr. Hardin's share: $40,000. Spend-down required: $40,000 – $2,000 = $38,000 before resource eligibility.

A common misconception: families assume the community spouse always gets at least $32,532, no more, no less. Wrong. Mrs. Hardin actually gets $40,000 because one-half exceeds the minimum. The minimum only kicks in when one-half would fall below it (as in a couple with $50,000 in total assets, one-half is $25,000, below the $32,532 floor, so the floor applies and the community spouse keeps $32,532).

Example 3: Income shift mechanics (CSIMA in detail)

The Robertses live in Memphis. Mrs. Roberts entered nursing care on July 1, 2025. Income picture:

• Mrs. Roberts (institutionalized spouse): $1,800/month Social Security + $1,000/month pension = $2,800/month
• Mr. Roberts (community spouse): $1,200/month Social Security only

Mr. Roberts continues to live in their Memphis home. Monthly shelter costs:

• Mortgage: $600
• Property taxes: $90/month (averaged from annual)
• Homeowners insurance: $80/month
• Utilities: claim Standard Utility Allowance of $451/month (rather than itemizing)

ESA calculation (Excess Shelter Allowance, effective 7/1/2025–6/30/2026):

• Total shelter: $600 + $90 + $80 + $451 = $1,221/month
• Standard Housing Allowance (SHA): $793.13/month
• ESA = $1,221 – $793.13 = $427.87/month

Maintenance Needs Standard:

• SMA: $2,643.75/month
• ESA: $427.87/month
• Total: $3,071.62/month

CSIMA calculation:

• Maintenance Needs Standard: $3,071.62
• Mr. Roberts's net income: $1,200
• Shortfall: $3,071.62 – $1,200 = $1,871.62/month
• This is below the Maximum MMMNA of $4,066.50, so CSIMA = $1,871.62

Patient liability calculation for Mrs. Roberts:

• Institutional income: $2,800
• Less PNA: $70 (TN NF rate, TCA § 71-5-147)
• Less CSIMA: $1,871.62
• Less Medicare Part B premium: $202.90 (2026 standard)
• Patient liability: $2,800 – $70 – $1,871.62 – $202.90 = $655.48/month

Result:

• Mrs. Roberts's patient liability paid to the nursing facility: $655.48/month
• TennCare pays the balance of the nursing facility bill ($8,000/month – $655.48)
• Mr. Roberts's monthly income: $1,200 (own) + $1,871.62 (CSIMA) = $3,071.62/month
• Mr. Roberts goes from $1,200/month to $3,071.62/month, a $1,871.62/month boost from the institutionalized spouse's income.

No CSRMA expansion is needed because the income flow alone fills the gap.

Example 4: Hughes v. McCarthy SPIA strategy

Common Mistakes (Top 10)

1. Using current asset values instead of the snapshot date. The snapshot is FROZEN. If your snapshot was March 1 and you're applying in November, the CSRMA is calculated on March 1 values, not November.

2. Forgetting that a couple can request a stand-alone resource assessment. Manual § 125.015 § 2(c) explicitly permits this. Most families and most LTC facilities do not know it. The snapshot is preserved at its highest-quality moment, with documentation that's hard to recover later.

3. Treating the community spouse's IRA as exempt. It is countable in Tennessee. Roth, traditional, 401(k), 403(b), SEP-IRA, all countable for both spouses. Florida exempts the community spouse's retirement accounts. TN does NOT.

4. Treating the community spouse's income as countable to the institutionalized spouse. The "name on the check" rule under 42 USC § 1396r-5(b)(2) means the community spouse's income is HER income alone during institutionalization. This is the most-misunderstood rule among DIY applicants.

5. Failing to claim the CSIMA Excess Shelter Allowance increase. Many community spouses do not know about the ESA. TennCare does not auto-calculate it; the family must document mortgage/rent/taxes/insurance/utilities. Bringing the SUA of $451 alone (without itemizing utilities) is often the easiest path.

6. Improper SPIA structure. Common failures: revocable, missing non-assignable language, balloon payments, term exceeding life expectancy, State not named primary remainder beneficiary, issuer not licensed.

7. Citing TCA § 71-5-XXX as a stand-alone spousal impoverishment statute. No such statute exists. Cite Tenn. Comp. R. & Regs. 1200-13-20-.08 and the TennCare ABD Manual § 125.005/125.015/125.020 instead.

8. Confusing CSRA (federal acronym) with CSRMA (TN's acronym in its manual). Both refer to the same concept. Use CSRA for public-facing content; use CSRMA when quoting TennCare directly.

9. Believing the Maximum MMMNA ($4,066.50) is automatic. It is NOT. The community spouse must demonstrate excess shelter costs (or get a CSRMA expansion via SFA-model fair hearing or court order) to exceed the SMA-only floor of $2,643.75.

10. Failing to retitle assets within the 12-month grace period. TennCare requires actual transfers of assets to effectuate the assessment within 12 months of initial eligibility approval (Manual § 125.015 § 6(a)). Failure to retitle accounts can void the assessment.

Special Scenarios

Same-sex spouses

Recognized federally and in Tennessee since Obergefell v. Hodges, 576 U.S. 644 (2015). TennCare treats same-sex married couples identically under the spousal impoverishment rules. Tennessee's pre-Obergefell statute at TCA § 36-3-113 (man-woman language) is unenforceable post-Obergefell and Tennessee has issued same-sex marriage licenses since June 26, 2015.

Common-law marriages

Tennessee does NOT permit creation of common-law marriage within Tennessee. The marriage license requirement at TCA § 36-3-104 effectively excludes informal-marriage formation in TN. However, Tennessee DOES recognize common-law marriages validly formed in another state under that state's law as a matter of comity (e.g., Texas, Iowa, Kansas, Colorado pre-2025, Oklahoma pre-1998, Pennsylvania pre-2005, Utah, Rhode Island). A common-law spouse who validly married in Texas and later moved to Tennessee qualifies as a "community spouse" for TennCare. Provide the originating state's recognition documentation (joint property records, joint tax filings, joint health insurance enrollment, hospital next-of-kin records, sworn statements).

Separation but not divorce

Per TennCare ABD Manual § 125.015 § 2(b): separation does NOT end community spouse status. The CSRMA may be allowed if a couple is still legally married, living separately and consider themselves separated, provided the community spouse can be located. Only divorce ends community spouse status. CSIMA mechanics under Manual § 125.020 § 3(d)(i)(7) work with separated couples if both spouses agree to the allocation and the community spouse is not herself institutionalized.

Death of community spouse during institutionalization

When the community spouse dies, the CSRMA share she held becomes hers alone, it does NOT revert to the institutionalized spouse for further protection. Whatever she owned at death passes through her probate estate (or through non-probate transfers like POD/TOD designations). TennCare can pursue estate recovery against her estate ONLY if the surviving spouse (the institutionalized spouse) was the recipient, and only against the recipient's probate estate at the recipient's death, subject to TN's $10,000 minimum-estate threshold under TCA § 71-5-116. Post-death of community spouse, the institutionalized spouse continues on TennCare with the standard $2,000 individual asset limit.

Both spouses in nursing facility

Per TennCare ABD Manual § 125.015 § 2(b) and § 125.020 § 3(d)(i)(3): a CSIMA is not allowed if both spouses are institutionalized. Each spouse is treated as an individual applicant with the $2,000 individual asset limit. If both apply on the same application, the $3,000 couple asset limit applies. MMMNA does not apply. Each spouse gets her own $70 NF PNA. The couple's home remains exempt if any spouse, child, or qualified relative resides there or with intent-to-return.

Spousal refusal, Tennessee's position

42 USC § 1396r-5(c)(3)(A)(ii) permits a state to deem the institutionalized spouse eligible if the community spouse refuses to make resources available, provided the institutionalized spouse assigns support rights to the state. New York is the famous spousal-refusal jurisdiction. Tennessee does NOT actively recognize spousal refusal as a planning strategy. The TennCare manual contemplates non-cooperative community spouses only through the undue hardship waiver path (Manual § 125.015 § 2(b) and § 6(c)), which is far harder to obtain than New York-style refusal. Tennessee families should not attempt spousal-refusal planning without explicit advice from a NAELA-member elder law attorney and should expect denial.

Common Misconceptions

1. "Medicaid will take our house." No. The home is exempt up to $752,000 of equity in 2026, and entirely exempt with no cap if a spouse, minor child, or blind/disabled child lives there. Estate recovery applies only against the institutionalized spouse's probate estate at death and is subject to TN's $10,000 minimum-estate threshold under TCA § 71-5-116 and SPA TN-24-0002 effective 4/1/2024.

2. "My spouse will lose her income." No. Under 42 USC § 1396r-5(b), the community spouse keeps ALL of her own income, no matter how high. Only the institutionalized spouse's income flows to the nursing facility (after PNA, CSIMA, premiums, and other deductions). A lower-income community spouse may separately qualify for a Medicare Savings Program that pays her own Medicare Part B premium.

3. "We have to divorce to protect assets." Almost never necessary in Tennessee. The CSRA + CSIMA + MMMNA framework typically protects more than divorce would, with none of the legal/emotional cost. Divorce can sometimes help in extreme high-asset cases but should be a last resort.

4. "My spouse can keep $162,660 no matter what." Only if one-half of countable assets exceeds $325,320. Otherwise the community spouse keeps one-half (capped at $162,660, floored at $32,532).

5. "Our IRAs are protected like 401(k)s in bankruptcy." No. IRAs (both spouses') are countable resources for TennCare. A Roth IRA, traditional IRA, 401(k), 403(b), and SEP-IRA are all countable.

6. "We can put assets in our kids' names if it's been more than 5 years." Only if the gift was made 60+ months BEFORE the TennCare application. Within 60 months, every dollar of uncompensated transfer triggers a look-back penalty, and the penalty starts only when the institutionalized spouse is otherwise eligible.

7. "My spouse's income counts against me for Medicaid." False, the community spouse's income is not deemed available during institutionalization.

8. "The CSRA snapshot is when we apply for Medicaid." False, it's the date of first continuous institutionalization (NF admission or PAE approval), often months earlier.

9. "I can refuse to share my income / assets with my institutionalized spouse, that's spousal refusal." Not in Tennessee. Spousal refusal is a New York technique. TN's only path for non-cooperative community spouses is the very narrow undue hardship waiver.

10. "A Lady Bird deed will protect our home from estate recovery." Tennessee does NOT recognize Lady Bird (enhanced life estate) deeds. Only Florida, Michigan, Texas, Vermont, and West Virginia do. Anyone recommending one for a TN home is wrong.

11. "I should put a CD in my spouse's name only, that exempts it." No. Countable resources are counted regardless of titling for the snapshot. The community spouse's portion is protected via the CSRMA percentage formula, not by titling.

12. "Once we get the CSRMA approved, we're done." No. TennCare requires actual transfers of assets to effectuate the assessment within 12 months of initial eligibility approval (Manual § 125.015 § 6(a) "Grace Period"). Failure to retitle accounts can void the assessment.

Pending Policy Watch (2026)

ACA § 2404 HCBS Sunset

The HCBS spousal impoverishment extension under Affordable Care Act § 2404 (originally December 31, 2018) is currently extended through September 30, 2027 under § 5115 of the Consolidated Appropriations Act, 2023 (P.L. 117-328). It has NOT been made permanent. The HCBS Access Act (S. 762, 118th Congress) would make the protections permanent but has not passed as of May 2026. Watch the September 30, 2027 sunset.

If § 2404 lapses, applying spousal impoverishment to HCBS waiver members reverts from a federal mandate to a state option. Tennessee has historically applied spousal impoverishment to HCBS members during prior lapses; we anticipate (but cannot promise) continued protection if § 2404 expires.

Federal CSRA / MMMNA Increase Proposals

Periodic bills introduced in Congress to raise the CSRA above $162,660 (the so-called "CSRA-100K" and "CSRA-300K" proposals) have not advanced. No current pending increase bill as of May 2026. CMS will release 2027 figures in December 2026.

Tennessee Legislative Session

No significant Tennessee bills changing spousal impoverishment in the 2025-2026 session as of May 2026. SB984 / HB1793 (transfer-on-death deeds for real property) is pending and would tangentially affect Medicaid planning but does not change spousal impoverishment.

Where to Get Help

TennCare official channels

• TennCare LTSS Help Desk: 1-877-224-0219
• TennCare Connect: 1-855-259-0701
• TennCare Eligibility Appeals Unit: appeal forms at tn.gov/tenncare/members-applicants/appeals.html
• TennCare Office of General Counsel: legal sufficiency review for QITs and SPIAs

Tennessee state agencies

• TN Long-Term Care Ombudsman Program (under TCAD): 1-877-236-0013
• Tennessee Commission on Aging & Disability (TCAD): tn.gov/aging.html
• Area Agencies on Aging & Disability (AAADs): 9 regional offices statewide
• TN Department of Commerce & Insurance, Insurance Division: for SPIA issuer complaints, 1-800-342-4029

Legal aid (no-cost for low-income seniors)

• Legal Aid Society of Middle Tennessee and the Cumberlands (Nashville): 1-800-238-1443
• Legal Aid of East Tennessee (Knoxville): 1-865-637-0484
• West Tennessee Legal Services (Jackson): 1-800-372-8346
• Memphis Area Legal Services (Memphis): 1-901-523-8822

Advocacy and policy

• Tennessee Justice Center: 1-877-608-1009
• AARP Tennessee: 1-866-295-7274
• NAELA (National Academy of Elder Law Attorneys), TN members: naela.org/findlawyer

Bar associations

• Tennessee Bar Association, Elder Law Section: tba.org
• TBA Lawyer Referral Service: 1-877-637-3528

When to Hire an Elder Law Attorney

For couples with substantial combined countable resources, hiring a Tennessee-licensed NAELA-member elder law attorney is essential, not optional. The math gets complex quickly, the SPIA structuring is technical, the Hughes-compliance overlay requires careful drafting, and the stakes are measured in tens or hundreds of thousands of dollars.

Typical fees in Tennessee:

• Stand-alone resource assessment review and pre-application planning: $1,500–$3,500 flat fee
• Comprehensive Medicaid planning package (including QIT, SPIA, deed work, application filing): $5,000–$10,000 flat fee
• Hardship/CSRMA fair-hearing representation: $300–$500/hour, typically 8–20 hours
• Court-ordered support action: $5,000–$15,000 (including TN family law attorney coordination)

Couples with more modest assets may be served by Legal Aid (free) or by the TBA Lawyer Referral Service, which provides 30-minute initial consultations for a nominal fee. Even a single hour with a NAELA-member attorney before applying can save tens of thousands in avoidable spend-down.

Related Reading

• Tennessee Medicaid pillar, overview of all TennCare LTSS pathways
• Tennessee Medicaid Eligibility & Income Limits, comprehensive financial eligibility framework
• Tennessee 5-Year Lookback and Penalty Divisor, 60-month transfer rules, DRA-2005 SPIA mechanics, Hughes v. McCarthy detail
• Tennessee Qualified Income Trust (Miller Trust), income-cap workaround for couples above $2,982/month
• Tennessee Personal Needs Allowance, $70/month NF rate, $2,982/month HCBS rate
• Tennessee Estate Recovery, what TennCare can recover after death
• How to Protect Your Home from Medicaid in Tennessee, tenancy by the entirety, MAPTs, the $752,000 home equity floor, and why Lady Bird and TOD deeds don't apply in Tennessee
• Tennessee Long-Term Care & Nursing Home Medicaid, CHOICES Group 1 framework
• Tennessee TennCare CHOICES, Group 1, 2, 3 program detail
• Tennessee How to Apply for Medicaid, step-by-step application guide
• Federal Spousal Impoverishment explained, federal framework hub

Learn More

• Tennessee Medicaid Programs Overview
• TennCare Eligibility & Income Limits
• Tennessee Long-Term Care & Nursing Homes
• Tennessee Qualified Income Trust (Miller Trust)
• Tennessee 5-Year Lookback & Penalty Divisor
• TennCare Estate Recovery

Find personalized help navigating Tennessee spousal impoverishment rules at brevy.com.

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.