Page 11

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 11 Life insurance premiums are not allowed as a deduction. ii. Medicare Premiums Medicare Parts A, B, C or D premiums are deductible as health insurance premiums, unless: 1. The individual is SSI eligible; 2. The individual is enrolled as an SSI Pickle Pass Along or Disabled Adult Child (DAC); or 3. The individual is enrolled in any of the following Medicare Savings Programs: Qualified Medicare Beneficiary (QMB), Specified Low Income Medicare Beneficiary (SLMB), Qualifying Individual (QI) or Qualified Disabled Working Individual (QDWI). g. Incurred Medical Expenses for Institutionalized Individuals The law allows for the deduction of expenses incurred by the eligible individual for medical or remedial care that are recognized by state law as medical or remedial care items but are not included in the State Plan. Tennessee calls these non-covered expenses Incurred Medical Expenses (IMEs). IMEs also include expenses incurred during the three (3) months immediately prior to application for coverage of institutional care. Institutional charges incurred during an institutional coverage ineligibility period due to an uncompensated transfer of assets may not be used as IME deductions. Cost items are those medical or remedial services and goods that must be provided by the nursing care providers. Cost items cannot be charged to the patient or allowed as an IME deduction. i. Criteria for Deduction of an Expense 1. The expense(s) must not be subject to payment by a third party not expecting reimbursement, e.g., medical or health insurance, medical trust fund, Medicare, etc. 2. The expense may be unpaid or paid by the client during the month(s) of eligibility determination or paid by a member of the client’s family and reimbursement is expected by the family member. 3. The expense must not have been allowed previously as a necessary item.