Texas Medicaid pays for nursing home care in full for people who qualify, and unlike home-based waiver programs, there's no waitlist. The income limit is $2,982/month, the asset limit is $2,000, and the state looks back five years at your financial history before approving coverage.

This guide explains who qualifies, how the money works once you're in, what the state protects for your spouse, and how families use Medicaid planning to preserve assets legally.

In This Guide

Institutional vs Community Medicaid

Texas has two main pathways for Medicaid long-term care, and they work differently.

Institutional (Nursing Home) Medicaid covers care in a nursing facility. It's an entitlement: if you meet the financial and medical requirements, you're approved. There's no waitlist, no interest list, no cap on enrollment. This is why some families end up in nursing homes even when they'd prefer home-based care. The nursing home path is immediately available.

Community-Based Medicaid (HCBS Waivers) covers care at home or in assisted living through programs like the STAR+PLUS HCBS waiver. These programs have limited slots and long interest lists, and many Texans wait years for a waiver slot. The financial eligibility rules are similar, but the availability is completely different.

The practical impact: if your loved one needs care now and can't wait for an HCBS waiver slot, nursing home Medicaid may be the faster path to covered care.

Not sure which Medicaid pathway fits your situation? Chat with Brevy for help understanding your options.

Texas Medicaid Nursing Home Eligibility Requirements

Financial Requirements

Requirement Single Applicant Married (one spouse applying)
Monthly income limit $2,982 $2,982 (applicant's income only)
Countable asset limit $2,000 $2,000 (applicant only)
Community Spouse Resource Allowance N/A Up to $162,660 for the at-home spouse

What counts as income: Social Security, pensions, annuity payments, interest, dividends, rental income. Basically all regular income.

What counts as assets: Bank accounts, investments, CDs, stocks, bonds, retirement accounts (in most cases), the cash value of certain life insurance policies, and any property beyond the primary home.

Exempt (Non-Countable) Assets

These don't count toward the $2,000 limit:

  • Primary home with equity up to $752,000 (as long as the applicant signs a Statement of Intent to Return Home where required, or a spouse or dependent lives there)
  • One vehicle, regardless of value
  • Irrevocable prepaid funeral plan, regardless of value
  • Designated burial funds
  • Personal belongings and household goods

Medical Requirements

The applicant must need a "nursing facility level of care," meaning they require the kind of daily medical supervision and personal care assistance that a nursing home provides. This is determined by evaluating the person's ability to perform Activities of Daily Living (bathing, dressing, eating, mobility, toileting) and any cognitive or behavioral issues.

The Miller Trust (Qualified Income Trust)

If income exceeds $2,982/month, the applicant isn't automatically disqualified. Texas allows a Qualified Income Trust (Miller Trust) to redirect excess income into a trust. The trust pays the nursing home, and the applicant qualifies for Medicaid. An attorney can set up a Miller Trust for a few hundred dollars. This is one of the most commonly used Medicaid tools in Texas.

How Texas Medicaid Pays the Nursing Home

Once Medicaid approves nursing home coverage, here's what happens financially:

  1. All of the resident's income goes toward the cost of care, except:

  2. Medicaid pays the difference between what the resident contributes and the nursing home's Medicaid rate. The nursing home can't charge the family anything above the Medicaid rate for covered services.

In practice, the resident keeps the $75 personal needs allowance, the rest of their income (after the Medicare premium and any spousal allowance) is applied to the nursing home bill, and Medicaid pays the remaining balance of the facility's Medicaid rate.

Spousal Protections

Texas law prevents the at-home spouse from going broke when the other spouse enters a nursing home.

Community Spouse Resource Allowance (CSRA)

The at-home spouse can keep up to $162,660 in countable assets in 2026. Here's how it works: at the time of application, Medicaid totals the couple's combined assets. The community spouse keeps 50% of the total, with a minimum of $32,532 and a maximum of $162,660.

Monthly Maintenance Needs Allowance (MMNA)

If the at-home spouse's own income is below $4,066.50/month, a portion of the nursing home spouse's income can be diverted to bring the community spouse up to that amount. This protects the at-home spouse's standard of living.

The Home

The primary residence is exempt while either spouse lives there. But after both spouses pass (or if the home is sold while the nursing home spouse is on Medicaid), Texas's estate recovery program may seek repayment from the proceeds.

The 5-Year Look-Back and Penalty Periods

This is where most families get into trouble.

How the Look-Back Works

When you apply for nursing home Medicaid, Texas reviews the past 60 months (5 years) of financial transactions. Any assets transferred below fair market value during that window can trigger a penalty period during which Medicaid won't pay for care.

How the Penalty Is Calculated

Texas divides the total uncompensated value of the transfer by the daily penalty divisor of $262.37 (effective September 1, 2025) and rounds down to whole days. The larger the gift, the longer the penalty: dividing the amount transferred by $262.37 gives the number of days Medicaid will not pay.

During the penalty period, the applicant is responsible for the full private-pay cost of nursing home care out of pocket, which in Texas runs a median of about $5,627 a month for a semi-private room.

What Triggers a Penalty

  • Gifting money to children or grandchildren
  • Selling property below market value
  • Paying off a relative's debts
  • Adding a child's name to a bank account and them withdrawing funds
  • Donating to charity in large amounts

What Doesn't Trigger a Penalty

  • Paying fair market value for goods or services
  • Transfers to a spouse (unlimited)
  • Transfers to a blind or disabled child
  • Transfers of the home to the caregiver child (an adult child who lived in the home for 2+ years before admission and provided care that delayed nursing home placement)

Medicaid Planning Strategies

Medicaid planning is the legal process of arranging finances to qualify for coverage while protecting the family's assets. It isn't fraud. It's using the rules as written. Here are the most common strategies in Texas:

Spend-Down on Exempt Assets

Convert countable assets into exempt ones:

  • Pay off the mortgage (home equity up to $752,000 is exempt)
  • Buy an irrevocable prepaid funeral plan (exempt regardless of value)
  • Make home repairs or modifications
  • Pay off debts and bills

Medicaid-Compliant Annuities

A Medicaid-compliant annuity converts a lump sum of cash into a stream of income payments to the community spouse. The annuity must be irrevocable, non-assignable, actuarially sound, and name Texas as the remainder beneficiary up to the amount of Medicaid paid. This effectively shelters assets while creating income for the at-home spouse.

Caregiver Agreements

A formal, written Personal Care Agreement between a parent and an adult child who provides care can convert what looks like a gift into fair-market-value compensation for services. The agreement must be signed before care begins, and payments must be reasonable for the services provided.

When to Talk to an Attorney

If your loved one has more than $2,000 in countable assets and may need nursing home care within five years, consult an elder law attorney. The sooner you plan, the more options you have. Find a certified elder law attorney through the National Academy of Elder Law Attorneys (NAELA).

Common situations where an attorney pays for themselves:

  • The applicant has a house, retirement accounts, or savings above the limit
  • Gifts or transfers were made within the past five years
  • The community spouse needs income protection
  • The family wants to protect the home from estate recovery

How to Apply for Nursing Home Medicaid

1
Step 1

Gather your documents

You'll need proof of identity, citizenship, Texas residency, income (Social Security statements, pension letters), assets (bank statements, investment accounts), and medical records showing the need for nursing facility care.

2
Step 2

Submit the application

Apply through your local Texas Health and Human Services Commission (HHSC) office, online at yourtexasbenefits.com, or with the help of the nursing home's Medicaid specialist (most facilities have one). The nursing home can also help with the Preadmission Screening and Resident Review (PASRR), a federally mandated screening for mental illness and intellectual or developmental disability that is required before admission to any Medicaid-certified facility, regardless of who pays.

3
Step 3

Complete the assessment

HHSC reviews financial eligibility and medical necessity. A caseworker may request additional documentation. The process typically takes 45 to 90 days, though it can take longer if documentation is incomplete.

4
Step 4

Claim retroactive coverage

Texas Medicaid can cover care retroactively up to three months before the application date if the applicant was eligible during that time. This means if you apply in April, Medicaid may cover care costs going back to January.

Frequently Asked Questions

Can I protect my parent's house from Medicaid?

The house is exempt during the applicant's lifetime (up to $752,000 in equity). But Texas has an estate recovery program that can seek repayment from the estate after death. To protect the home long-term, options include the caregiver child exemption (if a child lived there 2+ years providing care), a life estate deed, or an irrevocable trust created more than five years before applying. Consult an elder law attorney for your specific situation.

What if my parent's income is over $2,982/month?

Set up a Qualified Income Trust (Miller Trust). This legal tool redirects income above the limit into a trust that pays the nursing home directly. It's a standard solution used by thousands of Texas families and typically costs a few hundred dollars to establish through an attorney.

How long does it take to get approved?

Typically 45-90 days from application, assuming all documentation is submitted. Many nursing homes will admit a Medicaid-pending resident and bill Medicaid retroactively once approved. Ask the facility about their Medicaid-pending policy before admission.

Is Medicaid planning the same as hiding assets?

No. Medicaid planning uses legal strategies within the rules. Hiding assets, lying on applications, or fraudulently transferring property is illegal. Legal planning involves converting countable assets to exempt assets (like prepaying a funeral), using compliant annuities, establishing trusts within the rules, and timing applications strategically. An elder law attorney ensures everything is done properly.

Next Steps

If nursing home care is on the horizon, the time to plan is now, not after admission. The five-year look-back means financial decisions made today affect Medicaid eligibility years from now. To start, apply online at Your Texas Benefits, ask the nursing home's Medicaid specialist for help, or call 2-1-1 Texas for general health-and-human-services information and a referral. If your loved one has assets above the limit or made transfers in the past five years, talk to an elder law attorney before you apply.

Your Texas Benefits Apply for Texas Medicaid long-term care online. www.yourtexasbenefits.com
2-1-1 Texas General health-and-human-services information and referral. 2-1-1
National Academy of Elder Law Attorneys Find a certified elder law attorney near you. www.naela.org

Learn More

MedicaidNursing Home Medicaid by State: Coverage, Eligibility, and CostMedicaid pays for nursing-home care in every state, but the income cap, level-of-care test, and rules vary. The federal floor, what changes, and your state. MedicaidTexas Medicaid Programs for SeniorsTexas Medicaid programs for seniors 65+ include STAR+PLUS, CAS, HCBS waivers, and PACE. Find out what each one covers, who qualifies, and how to enroll. MedicaidTexas Medicaid Spend-DownTexas allows no income spend-down. As an income-cap state, it uses a Qualified Income (Miller) Trust. See the 2026 income, asset, and look-back rules. MedicaidTexas STAR+PLUS Waiver ProgramTexas STAR+PLUS covers Medicaid managed care for seniors 65+. The HCBS waiver income limit is $2,982/month, and Community First Choice has no waitlist. MedicaidWhat Texas Medicaid CoversTexas Medicaid covered services for seniors 65+: doctor visits, hospital care, drugs, vision, limited dental. See what STAR+PLUS covers and what it won't. MedicaidHow to Apply for Texas MedicaidHow to apply for Medicaid in Texas in 2026: the four ways to apply, the documents seniors need, the income-cap trap, timelines, and where to get free help. CaregiverHow to Get Paid as a Family Caregiver in TexasLearn how to get paid as a family caregiver in Texas through Medicaid CDS, CAS, VA programs, and CMPAS. Covers pay rates, eligibility, and step-by-step process.

Find personalized help applying for Texas Medicaid long-term care at brevy.com.

The information on Brevy.com is for educational purposes only and is not a substitute for professional legal, financial, or medical advice. Rules vary by state and program and change frequently. Always verify with the relevant agency or a qualified professional. Brevy is not a law firm, financial advisor, or healthcare provider.

BC

Brevy Care Team

Expert eldercare guidance from Brevy's team of healthcare professionals and researchers.