What this guide is best for
Direct answer: Use this guide when a parent's savings for assisted living in Tennessee will run out within a few years and the family needs a plan before that month arrives.
Best used when: TennCare CHOICES can pay for assisted living care services once income and assets are within its limits, but not room and board, and only where the community accepts it.
When the money runs out
Key point: TennCare CHOICES can pay for assisted living care services once income and assets are within its limits, but not room and board, and only where the community accepts it.
What a good provider should make clear: A runway that names the month funds run out, a community that will accept CHOICES or a planned move, and a TennCare application started early enough.
Common mistake: Waiting until the last month of savings to learn that the current community does not accept CHOICES, forcing a move at the worst time.
Questions to ask: Do you accept residents on TennCare CHOICES, how many, and can a private-pay resident convert to CHOICES and stay?
When the money runs out
Opening intent: explain what happens when a parent's assisted living money runs out in Tennessee and how to plan for it
- Use this page when: Use this guide when a parent's savings for assisted living in Tennessee will run out within a few years and the family needs a plan before that month arrives.
- Check first: TennCare CHOICES can pay for assisted living care services once income and assets are within its limits, but not room and board, and only where the community accepts it.
- Slow down if: Waiting until the last month of savings to learn that the current community does not accept CHOICES, forcing a move at the worst time.
- What to confirm next: Do you accept residents on TennCare CHOICES, how many, and can a private-pay resident convert to CHOICES and stay?
Quick answer
When a parent's money for assisted living runs out in Tennessee, the main safety net is TennCare CHOICES. It can pay for care services in an Assisted Care Living Facility, or for nursing home care, once your parent meets its medical need test and its financial limits: for 2026, income of no more than $2,982 a month and countable assets of no more than $2,000, with the home your parent lives in not counted. CHOICES does not pay room and board in assisted living, and not every community accepts it. The families who manage this well find out years ahead whether their parent's community takes CHOICES, and plan the month the money ends.
Medicaid spend-down is the process of using a person's own assets on their care and other allowed expenses until they fall within Medicaid's asset limit. In Tennessee, Medicaid long-term care is TennCare CHOICES, which pays for nursing home care or for home and community based services, including assisted living care, for people who qualify.
The figures on this page come from TennCare's own CHOICES page and its 2026 assisted living room and board memo. They change every year.
The CHOICES essentials
| Test | 2026 rule (TennCare) | What it means for families |
|---|---|---|
| Income | No more than $2,982 a month | Above that, a Qualifying Income Trust may be an option |
| Assets | No more than $2,000 in countable resources; the home you live in does not count | Savings above the limit are spent on care or allowed expenses first |
| Transfers | Nothing given away or sold for less than its worth in the last five years | Gifts to family can delay eligibility |
| Medical need | Assessed separately: nursing home level of care, or at risk of it | Your parent must need enough care to qualify |
| What it pays in assisted living | Care services up to $1,497.77 a month to the community; not room and board | Your parent pays room and board from income, capped at $2,385.60 a month for CHOICES members |
How CHOICES works in assisted living
Federal rules do not allow Medicaid to pay for room and board as part of home and community based services. So in assisted living, CHOICES pays the community for your parent's care services, and your parent pays room and board from their own income.
TennCare's 2026 memo sets the numbers. The community receives no more than $1,497.77 a month for covered care services. It may charge a CHOICES member no more than $2,385.60 a month for room and board, or less if that is what it charges other residents, unless the family chooses to pay extra for a private room. The maximum total the community receives is $3,883.37 a month.
That total is less than many Memphis-area communities charge private-pay residents. That is why many communities limit the number of CHOICES residents they accept, and some accept none.
Spend-down: using assets before CHOICES
If your parent's countable assets are above the limit, they are spent down first. Allowed ways to spend down include:
- Paying for care, including assisted living at the private rate.
- Paying debts and bills.
- Home repairs or modifications to the home, if it is still your parent's or a spouse's home.
- Medical equipment, dental work, hearing aids and glasses.
- A prepaid funeral arrangement, within the rules.
What is not allowed is giving assets away or selling them for less than they are worth within the five-year look-back. Gifts to children, even small regular ones, can create a period when TennCare will not pay for long-term care. Keep receipts for everything spent during spend-down.
Spouses have protections. When one spouse needs care and the other stays at home, Medicaid rules let the spouse at home keep a share of the couple's assets and income. The amounts change yearly; an elder law attorney can calculate them for your family.
When income is too high
If your parent's monthly income is above the CHOICES limit but not enough to pay for care, TennCare's CHOICES page points to a Qualifying Income Trust, sometimes called a Miller trust. Income above the limit is paid into the trust each month and used for care. Setting one up correctly matters; an elder law attorney can do it.
Communities that take CHOICES
The single most important question to ask any community if money may run out: do you accept residents on TennCare CHOICES, and can a private-pay resident convert to CHOICES and stay?
- Some communities accept CHOICES from move-in.
- Some accept residents who have paid privately for a set period and then qualify.
- Some accept a limited number of CHOICES residents and keep a waiting list.
- Some accept none, and a resident whose money runs out must move.
Ask for the answer in writing, and check the residency agreement. Our guide to the residency agreement explains where this sits. CHOICES members also work with a TennCare managed care organisation, which must have the community in its network; ask the community which plans it works with.
Planning the runway
- Write the monthly bill at your parent's current care level, and increase it each year by the community's recent increases.
- Write monthly income and subtract it from the bill to get the monthly shortfall.
- List assets and divide by the shortfall to find the month the money runs out.
- Subtract a buffer of several months, because the TennCare application and medical assessment take time.
- Decide now what happens at that month: stay and convert to CHOICES, move to a community that accepts CHOICES, a nursing home that accepts TennCare, or family support.
- Start the application early enough that coverage is in place when funds reach the limit.
If the runway is shorter than two or three years, choose a community that accepts CHOICES from the start. Moving a parent with dementia because the money ran out is one of the hardest things families describe.
How to apply
- Applications for TennCare long-term care can be started through TennCare Connect, online or by phone.
- The Aging Commission of the Mid-South is the Area Agency on Aging and Disability for Shelby County, and can help families understand CHOICES and get started.
- Your parent's managed care organisation, once enrolled, coordinates the care plan and authorises assisted living services.
- Expect requests for bank statements going back, proof of income, and records of any property sold or transferred.
Estate recovery
TennCare can seek repayment from a member's estate after death for long-term care costs it paid, subject to rules and exemptions, including when a surviving spouse or certain dependants remain. Families sometimes avoid CHOICES because of this; often it is still the right choice, because the alternative is care that cannot be paid for. An elder law attorney can explain how it would apply to your parent's estate.
Other options when savings run low
- VA pension with Aid and Attendance for wartime veterans and surviving spouses, which reduces the monthly shortfall. See how families pay.
- Long-term care insurance, if a policy exists and has not been claimed.
- Selling or renting the house, if it is no longer needed by a spouse.
- A shared apartment or smaller unit in the same community, which lowers the base rate.
- A smaller residence or a residential home for the aged, which may cost less than a large community.
- Family contributions, agreed and written down among siblings so they are sustainable.
Questions to ask
- To the community: do you accept TennCare CHOICES? From move-in, or after a period of private pay? How many CHOICES residents do you take, and is there a waiting list?
- To the community: what happens to a resident whose funds run out? Is that written in the agreement?
- To an elder law attorney: how long is our runway, what spend-down is allowed, and how is a spouse protected?
- To the Aging Commission of the Mid-South: how do we start a CHOICES application, and how long does it take?
An example runway
Consider a parent whose income covers part of the monthly bill, leaving a shortfall paid from savings. If the shortfall is a third of the savings each year, the money lasts about three years at today's prices, and less once annual increases and a higher care level are counted. Subtract a few months for the TennCare application. The family now knows to choose a community that will accept CHOICES within about two and a half years, or to plan a move before then.
Run your own numbers with the real figures. The point is the date, not the precision: once a family knows roughly when the money ends, every other decision gets easier.
The nursing home safety net
If no assisted living community near your family will accept CHOICES, or your parent's needs have grown, a nursing home that accepts TennCare is the other route. CHOICES Group 1 covers nursing home care for people who qualify, including room and board, with the resident contributing most of their income toward the cost. Nursing homes are inspected under federal rules and appear on Medicare's Care Compare, so you can check them before choosing.
Why starting early protects your parent
Most of the hard outcomes in this guide come from timing. A family that learns in the first month that their parent's community does not accept CHOICES can choose another community while their parent is still settling. A family that learns in the last month of savings faces a forced move, sometimes for a parent with dementia who has lived in the same apartment for years. The same is true of gifts within the look-back period, a house sold without advice, or a TennCare application started too late. Asking the CHOICES question at the first tour, and writing the runway in the first week, costs nothing and prevents the worst of these.
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Frequently asked questions
What happens when assisted living money runs out in Tennessee?
Your parent may qualify for TennCare CHOICES, which pays for care services in an Assisted Care Living Facility but not room and board, if the community accepts CHOICES. If it does not, your parent may need to move to one that does, or to a nursing home that accepts TennCare.
What are the 2026 TennCare CHOICES limits?
TennCare lists income of no more than $2,982 a month and countable resources of no more than $2,000, with the home your parent lives in not counted. A separate assessment confirms the medical need for care.
What is the Medicaid look-back in Tennessee?
TennCare reviews whether anything was given away or sold for less than its worth in the five years before applying. Transfers in that period can delay eligibility for long-term care.
Does TennCare pay room and board in assisted living?
No. Federal rules bar Medicaid from paying room and board in home and community based services. The resident pays it from income, and TennCare's 2026 memo caps the charge to CHOICES members at $2,385.60 a month.
Do all assisted living communities accept TennCare CHOICES?
No. Some accept it from move-in, some after a period of private pay, some only for a limited number of residents, and some not at all. Ask each community and get the answer in writing.
What if my parent's income is above the CHOICES limit?
TennCare's CHOICES page points to a Qualifying Income Trust, sometimes called a Miller trust, for people whose income is above the limit. An elder law attorney can set one up correctly.
Does TennCare take the house?
The home your parent lives in does not count toward the CHOICES asset limit. TennCare can seek repayment from the estate after death for long-term care it paid, subject to exemptions such as a surviving spouse.
Who can help with a CHOICES application in Memphis?
The Aging Commission of the Mid-South, the Area Agency on Aging and Disability for Shelby County, can help families understand CHOICES and start an application. An elder law attorney can advise on spend-down and spouses.
What to do next
Educational only. Not legal or financial advice. TennCare rules and figures change each year; check TennCare's own pages and speak to an elder law attorney before transferring assets.