How to Get TennCare CHOICES to Pay for Memory Care Without a Medicaid Planner

If you are trying to get TennCare CHOICES to cover memory care services for a parent with dementia, the process is procedural — not something that inherently requires a $6,000 to $15,000 Medicaid planning engagement. You need to meet specific financial thresholds, file with the correct enrollment group, and handle one mechanical step (the Qualified Income Trust) that most families can manage without legal counsel. Here is the complete process, the specific points where families get stuck, and the narrow set of situations where you genuinely need professional help.

The essential facts: TennCare CHOICES does cover care services delivered inside a licensed memory care facility. It does not pay for room and board — that comes out of your parent's income after the personal needs allowance. The coverage gap between what CHOICES pays and the total facility cost is real, but it is dramatically smaller than paying the full private-pay rate of $5,500 to $7,000 per month.

The Three Enrollment Groups — and Why the Wrong One Wastes Months

TennCare CHOICES has three enrollment groups, and most families apply for the wrong one because online sources treat them interchangeably.

Group 1: Nursing Facility Services. Covers care in a licensed nursing facility (not an ACLF or RHA). Your parent must meet nursing-home level of care based on the Pre-Admission Evaluation (PAE) acuity score. This is the group for parents who need skilled nursing — continuous medical monitoring, pressure ulcer management, feeding tubes, or other services that an assisted living facility cannot legally provide.

Group 2: Home and Community-Based Services (HCBS). Covers services delivered in the community or inside a licensed ACLF, up to a daily cost-neutrality cap of $294.87. This is the group most families with a parent in memory care need. Group 2 pays for the care services (personal care, medication management, supervision) but not room and board. It also includes the Consumer Direction option, which lets you hire and pay a family member as a caregiver.

Group 3: At-Risk. Covers seniors who need some support but do not yet meet nursing-home-level criteria. Annual HCBS capped at approximately $18,000. This group is for early-stage situations where your parent can still manage many daily activities independently.

If your parent has moderate-to-advanced dementia and is being placed in a memory care ACLF, you almost certainly need Group 2. Filing for Group 1 when you want ACLF placement — or Group 3 when your parent already needs full-time supervision — creates a mismatch that can delay the application while the correct level of care and service pathway are determined.

Financial Eligibility: The Numbers That Matter

These thresholds are hard limits. Tennessee does not operate a medically needy spend-down program for adults. If your parent's income exceeds $2,982, there is no mechanism to deduct medical expenses to bring it under the cap. The only legal option is a Qualified Income Trust.

The Qualified Income Trust: The Step Most Families Think Requires an Attorney

The QIT — also called a Miller Trust — is a simple legal instrument with a specific purpose: it receives your parent's monthly income and distributes it in a mandated order so that TennCare sees the income flowing through a trust rather than directly to the applicant. It is the single most common reason families hire a Medicaid planning attorney, and it is the step most families can handle themselves.

What you need to do:

1. Draft the trust document. The language is standardized — TennCare requires specific provisions, including naming the State of Tennessee as the primary remainder beneficiary. Template language is available in Tennessee-specific dementia care guides.

2. Use the applicant's Social Security number as the QIT tax identification number. The QIT is a grantor trust; confirm the bank's QIT requirements before opening the account.

3. Open a separate checking account. Take the trust document and the applicant's Social Security number to any bank. Open a non-interest-bearing checking account in the trust's name. Some banks are more familiar with QITs than others — larger banks with elder law departments handle these regularly.

4. Deposit your parent's income each month. All income — Social Security, pension, any other regular payments — must flow through this account.

5. Distribute in the correct order every month. This is the critical compliance step. The distribution waterfall is federally mandated and must be followed exactly:

   • Personal Needs Allowance ($2,982 Community Personal Needs Allowance for Group 2 HCBS; $70 for Group 1 nursing-facility residents)
   • QIT bank fees (up to $20)
   • Spousal Income Allocation (if applicable)
   • Approved health insurance premiums
   • Patient liability (remaining balance paid to the facility or MCO)

One deviation from this sequence — using trust funds for home maintenance, credit card bills, or life insurance premiums — can invalidate the trust and trigger retroactive loss of benefits.

When you DO need an attorney for the QIT: If your parent has income from multiple sources that interact in complex ways (rental income, annuity distributions, variable pension payments), or if there is a surviving spouse with their own income that needs to be coordinated with the Minimum Monthly Needs Allowance, professional advice on the distribution waterfall is worth the cost.

The Application Process Without Professional Help

Step 1: Start the application. If your parent is not currently enrolled in TennCare, call TennCare Connect at 1-855-259-0701 or the AAAD at 1-866-836-6678 to begin or get help with a CHOICES application. If your parent is already enrolled, contact the assigned health plan/MCO for CHOICES information.

Step 2: Gather financial documentation. You will need 3 months of bank statements, proof of all income sources (Social Security award letter, pension statements), property records, life insurance policies, burial fund documentation, and vehicle titles. If your parent's income exceeds $2,982, have the QIT established and the bank account open before you submit.

Step 3: Complete the Pre-Admission Evaluation. A physician, nurse practitioner, or physician assistant submits the PAE with clinical documentation. TennCare uses the PAE's acuity score to determine whether your parent meets nursing-home level of care; a dementia diagnosis alone does not guarantee Group 2 HCBS eligibility.

Step 4: Submit the application through TennCare Connect or your local AAAD. Include all financial documentation and your QIT documentation if applicable, and submit the PAE through the clinical eligibility process as directed. Long-term services and supports applications can take up to 90 days to decide.

Step 5: Receive the notice of determination. If approved, TennCare or your health plan assigns a care manager who develops a person-centered support plan. If denied, you have the right to appeal through TennCare's fair hearing process within 30 days.

Who This Is For

• Families whose parent has dementia, meets or is close to the TennCare income and asset limits, and who want to apply without paying $6,000–$15,000 for a Medicaid planner
• Caregivers who are comfortable following detailed procedural instructions and managing monthly QIT distributions
• Adult children who have legal authority (POA) to act on their parent's behalf and can gather and submit financial documentation
• Families in straightforward financial situations — single income source, home under $752,000 equity, no recent large asset transfers

Who This Is NOT For

• Families whose parent made large gifts or asset transfers within the past 60 months that might trigger a lookback penalty
• Situations where the parent has complex income streams (rental properties, business income, multiple annuities) that require professional analysis of the QIT waterfall
• Cases where the parent has already lost capacity and no POA exists — you need a conservatorship before you can apply on their behalf
• Families with a surviving spouse whose own finances require CSRA and MMNA calculations beyond the standard range

The Tradeoff: Time vs Money

Doing this yourself costs time. The application process from first phone call to approval takes 45 to 90 days. The QIT setup adds another 1 to 2 weeks for the trust document and bank account. Monthly QIT maintenance takes 30 to 60 minutes per month for the rest of your parent's enrollment.

Hiring a Medicaid planner costs money — $6,000 to $15,000 for the engagement, plus the ongoing relationship if something goes wrong. But they handle the paperwork, the MCO communication, and sometimes the appeal if the initial application is denied.

For families in straightforward situations — income under or slightly over the cap, minimal assets, no lookback concerns — the self-navigation path saves thousands of dollars and puts you in control of the timeline. For families with complications, the attorney fee prevents mistakes that cost far more.

Frequently Asked Questions

Does TennCare CHOICES actually pay for memory care?

TennCare CHOICES Group 2 pays for care services delivered inside a licensed ACLF with a secure memory care unit. It covers personal care, supervision, medication management, and other HCBS services up to $294.87 per day. It does not pay for room and board — that cost (typically $2,000 to $3,500 per month) comes out of your parent's income after the personal needs allowance.

What happens if my parent's income is $3,100 per month — just over the cap?

You establish a Qualified Income Trust. All of the parent's income that must be placed in the QIT flows through it. For Group 2 HCBS, the parent keeps the $2,982 Community Personal Needs Allowance; the $118 above that amount, less any approved deductions, becomes part of the patient liability.

Can I hire a family member as a caregiver through TennCare CHOICES?

Yes. Group 2 includes the Consumer Direction option, which lets a family member serve as a paid caregiver. The MCO authorizes a specific number of hours, and the family caregiver is paid through a fiscal intermediary. Family members, including spouses, may be eligible, but program-specific limitations apply; the worker must meet required qualifications and training. The guide covers the enrollment process and payment mechanics.

How long does the TennCare CHOICES application take?

From gathering documents to receiving a determination: 45 to 90 days. If you need to establish a QIT first, add 1 to 2 weeks for the trust document and bank account. If the initial application is denied, the appeal process adds another 30 to 60 days.

What is the biggest mistake families make when applying without an attorney?

Filing for the wrong enrollment group. Families who apply for Group 1 (nursing facility) when they want ACLF memory care placement, or Group 3 (at-risk) when their parent already needs full-time supervision, trigger a mismatch that delays the entire process. The second biggest mistake is not establishing the QIT before submitting the application — TennCare will not process an over-income application while the trust is being set up.

The Tennessee Dementia & Memory Care Guide includes the complete TennCare CHOICES application walkthrough, QIT setup instructions with distribution templates, and facility evaluation tools — everything you need to navigate the process yourself for under $24.

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