Knoxville Senior AdvisorBy Knoxville Senior Advisor Care Team · October 1, 2026
TennCare CHOICES Groups 2 and 3 cover Assisted Care Living Facility services, meaning personal care, homemaker help and medications, but the resident pays room and board. With a 2026 income cap of $2,982 a month and a $2,000 resource limit, the gap decides whether assisted living stays affordable.
What CHOICES pays for in assisted living
TennCare CHOICES is Tennessee's Medicaid long-term care program. Group 1 covers nursing home care. Groups 2 and 3 cover home and community-based services, and one of those services is Assisted Care Living Facility services: help with personal care, homemaker services and medication, paid at one unit per day.
What the benefit table excludes is just as clear: the member pays room and board. In an assisted living bill, that is the apartment and the meals, often the larger share.
Why the gap matters
Consider a widow in Fountain City with $1,700 a month from Social Security and a small pension, and almost no savings left. She qualifies financially for CHOICES and meets the level-of-care standard for Group 2. CHOICES can pay the care portion at a participating ACLF. But if that community's room-and-board rate is $2,400 a month, her income does not reach.
| Monthly figure | Example amount |
|---|---|
| Resident's income | $1,700 |
| Room and board charged by the ACLF | $2,400 |
| Gap the resident must cover | $700 |
| Care services | Paid by the CHOICES health plan |
The example is illustrative, not a quote. The point is that CHOICES eligibility and assisted living affordability are two different questions.
Not every ACLF participates
Knoxville-area ACLFs are not required to contract with the TennCare health plans, and many private-pay communities do not. Those that do may limit how many CHOICES residents they accept. Ask each community two questions directly: do you accept CHOICES members for Assisted Care Living Facility services, and what is your room-and-board rate for them?
Ask early. A resident who moves in privately and runs low on savings has a much smoother path if the community already accepts CHOICES.
Ways families close the gap
Families close it with a combination of the resident's income, help from adult children paid directly to the community, VA Aid and Attendance for eligible veterans and surviving spouses, and choosing a community with a lower room-and-board rate or a shared room.
When none of that works, CHOICES Group 1 in a Medicaid-certified nursing home pays the full cost, with the resident keeping a $50 monthly personal needs allowance. Staying at home with CHOICES personal care visits, adult day care and respite is the other option.
Group 2 or Group 3?
CHOICES Group 2 is for people who meet nursing facility level of care but choose to receive services at home or in assisted living. Group 3 is for people at risk of nursing home placement who do not yet meet that level. Both can receive Assisted Care Living Facility services. Group 3 enrollment is limited by funding, with an enrollment target of 3,750 non-SSI members as of July 1, 2025, so a Group 3 applicant may face a wait that a Group 2 applicant does not.
The look-back and the house
TennCare reviews five years of financial records for gifts or sales below fair value. A transfer in that window can delay coverage. The home where a person lives is excluded from the $2,000 resource limit, but selling it turns it into countable cash. Families who expect to need CHOICES within a few years should talk to an elder law attorney before selling a parent's house or giving money to children.
For married couples, federal spousal impoverishment rules protect a share of assets and income for the spouse who stays home. Those protections apply to CHOICES home and community services as well as to nursing home care.
Questions to ask a community that accepts CHOICES
Ask how many CHOICES residents the community serves today, whether a private-pay resident can convert to CHOICES without moving to a different apartment, what the room-and-board rate is for CHOICES members, and which TennCare health plans the community contracts with. The answers vary widely across the Knoxville area, and they determine whether a parent can stay put when savings run out.
If income is above the cap
A person whose income is above $2,982 a month can still qualify for CHOICES through a Qualifying Income Trust, sometimes called a Miller trust. Income above the cap is deposited into the trust each month and used for care costs under TennCare's rules. Setting one up correctly matters; an elder law attorney can draft it.
How to apply
People already on TennCare ask their health plan for a CHOICES assessment. Others apply through TennCare Connect or 855-259-0701, and can get free help from the ETHRA Area Agency on Aging and Disability at 1-866-836-6678. Have bank statements, income letters and insurance cards ready, and remember the five-year look-back on gifts.
Frequently asked questions
Does TennCare pay for assisted living rent?
No. CHOICES pays the care services; the resident pays room and board.
What is the 2026 income limit for CHOICES?
$2,982 a month; a Qualifying Income Trust can be used for income above that.
Do all Knoxville assisted living communities accept CHOICES?
No. Participation is voluntary, so ask each community directly.
Who helps with a CHOICES application?
ETHRA's AAAD at 1-866-836-6678 screens and helps people not yet enrolled in TennCare.
