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Aged, Blind and Disabled Manual Section: Institutional Medicaid Policy Manual Number: 125.020 Chapter: Post-Eligibility Treatment of Income

July 1, 2026 Division of TennCare 10 1. Calculate DIMA An amount equal to the Medically Needy Income Standard (MNIS) may be allocated to dependent relatives living in the home without a community spouse if the total net countable income of the dependent(s) is less than the MNIS for the household size. To determine a dependent’s net countable income, first subtract $65 from the dependent’s gross earned income and divide the remainder in half. The result is the dependent’s net earned income. Add the dependent’s net earned income and gross unearned income together. The result is the dependent’s net countable income. a. Determine Dependent’s Net Countable Income Gross Earned Income – Earned Income Disregard ($65) – ½ Remainder = Net Earned Income Gross Unearned Income + Net Earned Income = Net Countable Income a. Calculate DIMA Add the net countable income of all dependents together. Compare the combined total to the MNIS for the household size. See the MNIS chart in the Child Medically Needy policy. If the combined total is more than the MNIS, no dependent allocation is given. If the combined total is less than the MNIS, the dependent allocation is the amount of the MNIS for the household size. f. Health Insurance Premiums Verified health insurance premiums may be deducted when determining an individual’s patient liability. When health insurance premiums for several coverage months are due in a given month, the premiums paid in that given month cannot be prorated over the coverage period. Any premium amount which exceeds the individual’s income can be applied against his or her patient liability in following months. i. Criteria for Deduction of Health Insurance Premiums Premiums are deducted for health insurance policies that meet the following criteria: 1. The policy is reported to TennCare as third party liability (TPL); 2. Benefits are assignable and the individual has agreed to assign them to the State of Tennessee (TennCare); and 3. Premiums are paid by the individual, and not by a third party.