What You Can Keep on Texas Medicaid: The Personal Needs Allowance

When a Texan moves into a Medicaid nursing home, nearly all of their monthly income goes to the facility, and they keep just $75 a month for themselves. That $75 is the Personal Needs Allowance (PNA), and it covers everything personal: clothing, a telephone, snacks, haircuts, a newspaper, a small gift for a grandchild. It applies to nursing-home residents under Institutional Medicaid and to people receiving long-term services through the STAR+PLUS Home and Community-Based Services (HCBS) waiver in a residential setting.

In This Guide

• The 60-Second Version
• What the Texas PNA Is and Why It Exists
• What the Texas PNA Can Be Spent On
• What It Cannot Be Spent On
• The Patient-Pay Calculation: How $75 Survives the Income Surrender
• Worked Example 1: Eleanor Single
• Worked Example 2: Frank Married, MMNA Deflection
• The QIT (Miller Trust) and PNA: How They Interact
• STAR+PLUS HCBS and the Personal Needs Allowance
• National PNA Comparison
• 10 Practical Tips for Texas Families
• 8 Common Pitfalls
• Where to Get Help
• Frequently Asked Questions
• Related Reading

The 60-Second Version

• Texas's PNA is $75/month in 2026, mid-tier nationally; well above the federal $30/month floor.
• The figure is retained by the resident; all other income (after Medicare premiums, MMNA deflection, allowable medical) goes to the facility as patient-pay.
• Texas is a strict income-cap state: applicants over the 300% SSI FBR special income limit (~$2,982/month in 2026) need a Miller Trust to qualify; the QIT pays out the $75 PNA monthly to the resident.
• The PNA applies to Institutional Medicaid (nursing facility) AND STAR+PLUS HCBS residents in Medicaid-covered residential settings.
• Texas Health and Human Services Commission (HHSC) administers the patient-pay calculation; the facility or STAR+PLUS managed-care organization (MCO) handles operational implementation.
• Allowable uses include clothing, hygiene products, telephone/cellphone, haircuts, snacks, newspapers, gifts to family, modest transportation, small personal items.
• Texas asset limit is $2,000 for a single institutional applicant; banked PNA accumulates quickly and must be actively spent or distributed each month.
• For married Texas residents, the institutionalized spouse keeps the $75 PNA AND deflects MMNA to the community spouse (up to the federal MMNA maximum of $4,066.50/month in 2026 via income-first methodology).
• Banked PNA pushing assets above the $2,000 cap is a real risk; quarterly resident-trust-fund review is essential.

What the Texas PNA Is and Why It Exists

When a Medicaid recipient enters a Texas nursing facility under Institutional Medicaid, or receives Medicaid-covered long-term services through STAR+PLUS HCBS in a residential setting, federal law requires the recipient to surrender substantially all of their monthly income to the facility (or to the STAR+PLUS MCO for facility passthrough) as the recipient's "patient-pay" or "co-payment for cost of care." Medicaid covers the difference between the facility's contracted Medicaid daily rate and the resident's patient-pay liability.

But federal law also recognizes that surrendering 100% of income would strip Medicaid LTC residents of any ability to engage in life inside the facility. The Personal Needs Allowance is the federal mechanism that preserves a small monthly sum for these uses. 42 USC § 1396a(q) establishes a $30/month federal floor for the PNA and authorizes states to set higher figures. Texas has set its PNA at $75/month, well above the federal floor.

The Texas $75 figure represents legislative judgment that nursing-facility and HCBS residents need meaningful disposable income to maintain dignity, family connection, and personal autonomy. Advocacy organizations including the Texas Health Care Association (THCA), LeadingAge Texas, AARP Texas, and the Texas Long-Term Care Ombudsman Program have documented the inadequacy of lower figures relative to senior-resident expense surveys.

What the Texas PNA Can Be Spent On

The PNA is the resident's discretionary money. As long as the resident retains capacity to manage personal funds (or directs their representative payee), the PNA may be spent on essentially any lawful, personal purpose. Federal regulation 42 CFR § 483.10 protects resident control over personal funds and prohibits facilities from steering or restricting resident spending decisions for non-allowable purposes.

Common allowable uses include:

1. Personal Care Items, toothpaste, deodorant, lotion, shampoo, hair products, shaving supplies, denture-care products, eyeglass-cleaning supplies, hearing-aid batteries, replacement reading glasses, and incontinence supplies beyond what the facility provides. (Medicaid-covered prescription drugs and Medicaid-covered DME do NOT come from the PNA.)

2. Communication, cellphone service (Texas residents often maintain cellphones for family-connection across the state's vast geography), prepaid phone cards, postage stamps, greeting cards, birthday cards, internet service for personal devices, basic video-call equipment for family conversations.

3. Clothing, replacement clothing, undergarments, socks, slippers, sweaters (Texas facilities are typically air-conditioned year-round, so residents need more sweaters/jackets than non-Texas readers expect), hats, basic shoes, lightweight outdoor clothing for outings.

4. Entertainment and Reading, local newspaper subscriptions (Houston Chronicle, Dallas Morning News, San Antonio Express-News, Austin American-Statesman, Fort Worth Star-Telegram, etc.), magazines, paperback books, crosswords, puzzles, knitting supplies, basic art supplies, religious/devotional materials, a small TV for the room, headphones for personal listening.

5. Social and Family, small gifts to grandchildren and family members (within Medicaid gift-rule limits), birthday cards, holiday cards, photographs and frames, modest contributions to family events, transportation to off-site family gatherings.

6. Comfort and Dignity, haircuts and salon services from the facility's contracted barber/stylist, manicures, religious-observance items, preferred pillows or small comforters that the facility allows, slippers, robes.

7. Tobacco and Personal Discretionary, for residents who smoked at admission, cigarettes (subject to facility smoke-free policy; many Texas facilities have designated outdoor smoking areas), e-cigarettes (where permitted), modest beer or wine (where facility permits and physician approves), small personal vices that contribute to quality of life.

8. Texas-Specific Discretionary, modest spending on Texas-specific cultural activities (a high-school football radio subscription for Friday-night fall games; a Texas-specific magazine; a Texas Lottery scratch-off ticket where allowed by facility policy) supports cultural connection that is uniquely meaningful in Texas senior populations.

The North Star principle: the PNA is the resident's money for the resident's life. The resident decides what brings them dignity and comfort. Family members and facility staff should support spending choices, not police them.

What It Cannot Be Spent On

Several categories of expense are NOT PNA-eligible because they are either Medicaid-covered (and therefore must not double-count) or facility-provided (and therefore must not be charged twice):

• Room and Board, included in the facility's Medicaid daily rate and recovered through patient-pay liability.
• Medicaid-Covered Services, physician visits, prescription drugs covered by Texas Medicaid, durable medical equipment, therapy services, hospital stays, etc. Over-the-counter medications, vitamins, and supplements without a prescription may be PNA-eligible if approved by the resident's physician.
• Medicare Part B Premiums, these are deducted from gross income BEFORE patient-pay calculation under 42 CFR § 435.725 and TX HHSC policy. The premiums sit higher in the deduction stack than the PNA.
• Medigap Premiums, also deducted from gross income BEFORE patient-pay calculation, where the resident maintains a Medigap policy. Most Texas nursing-facility Medicaid residents drop Medigap upon Medicaid eligibility, but those who retain Medigap deduct the premium higher in the stack than the PNA.
• Health Insurance Premiums for Other Coverage, supplementary insurance (e.g., an old retiree health plan) deducts higher in the stack than the PNA.

The deduction-stack ordering is established under 42 CFR § 435.725 and Texas HHSC operational policy. The resident's gross income is reduced sequentially: first by the PNA ($75), then by health-insurance premiums (Medicare Part B, Medigap, etc.), then by community-spouse MMNA deflection (if married), then by court-ordered family-member support, then by uncovered medical expenses. The remainder is the resident's patient-pay liability.

The Patient-Pay Calculation: How $75 Survives the Income Surrender

The patient-pay calculation is the financial mechanic that produces a Texas resident's monthly contribution to the facility. Here is the formula in Texas deduction-stack order:

Gross Monthly Income
  − Personal Needs Allowance ($75/month)
  − Medicare Part B Premium (current-year amount on medicare.gov)
  − Medigap Premium (if applicable)
  − Other Health Insurance Premium (if applicable)
  − Minimum Monthly Maintenance Needs Allowance (MMNA) deflection to community spouse (if married)
  − Court-Ordered Family Member Support (rare)
  − Approved Uncovered Medical Expenses
  = Monthly Patient-Pay Liability to the Facility / STAR+PLUS MCO

For a single resident, the calculation typically reduces to:

Gross Income − $75 PNA − Medicare Part B Premium − any Medigap = Patient-Pay

For a married resident with MMNA deflection, the calculation expands to include the community-spouse income protection (the 2026 MMNA range is $2,643.75 minimum to $4,066.50 maximum). Texas applies the federal income-first methodology: if the community spouse has less than the MMNA minimum from their own sources, the institutionalized spouse may deflect from their own income to bring the community spouse up to that level. The deflected amount sits ABOVE the PNA in the stack, meaning the institutionalized spouse keeps the $75 PNA AND deflects whatever amount is needed to satisfy the MMNA.

Worked Example 1: Eleanor Single

Eleanor is 80, widowed, and entered a nursing facility in Houston in March 2026 after a fall led to long-term complications. She is approved for Texas Institutional Medicaid effective her admission date. Her income consists of:

• Social Security retirement benefit: $2,000/month
• Modest pension from her former Houston ISD teaching career: $500/month
• Total gross income: $2,500/month

Eleanor's gross income is below the 300% SSI FBR special income limit, so she does NOT need a Qualified Income Trust. Her Medicare Part B premium is automatically deducted from her Social Security check at the standard 2026 rate (verify the current figure on medicare.gov). She has no Medigap (she dropped it upon Medicaid eligibility). Her monthly patient-pay calculation:

$2,500 gross income
−   $75 PNA
−   Medicare Part B premium (current 2026 figure)
=   Patient-pay liability to the nursing facility

The facility receives Eleanor's patient-pay each month, and Medicaid covers the difference between her contracted Texas Medicaid daily rate (consult the current HHSC nursing-facility rate schedule for the operative figure) and her patient-pay.

Eleanor's $75 PNA is deposited monthly into her resident-trust-fund account at the facility. She uses approximately $50-$65 each month on cellphone service, her Houston Chronicle subscription, and a monthly haircut. The remainder accumulates in her resident-trust-fund account; by holiday season, she has saved enough to purchase modest gifts for each of her three grandchildren. Her social worker reviews her resident-trust-fund balance quarterly to ensure she is not accumulating beyond Texas's $2,000 institutional Medicaid asset limit (a real risk at $75/month accumulation if savings are not actively used).

Worked Example 2: Frank Married, MMNA Deflection

Frank is 81 and entered a nursing facility in Dallas in February 2026 with advanced Parkinson's disease. His wife Hilda, 79, lives in their longtime home in suburban Plano. Frank is approved for Texas Institutional Medicaid effective his admission date.

Critical step: Frank's gross income exceeds the 300% SSI FBR special income limit, so he must establish a Qualified Income Trust (Miller Trust) before Medicaid eligibility can begin. His attorney drafted the QIT under Texas Estates Code Chapter 142, naming Hilda as trustee; the QIT was funded with Frank's first month of over-cap income. Texas HHSC then processed Frank's eligibility with the QIT in place. Frank's income:

• Social Security retirement benefit: $2,400/month
• Pension from his former engineering career: $1,000/month
• Total gross income: $3,400/month (over the 300% SSI FBR cap; QIT required)

Hilda's own income:

• Social Security spousal benefit: $1,200/month
• (No pension; she retired from part-time work years ago)
• Total community-spouse income: $1,200/month

Hilda's MMNA under federal income-first methodology: assume her shelter costs (mortgage, property tax, utilities) push her above the MMNA minimum after the shelter excess calculation. She has $1,200/month of her own; she needs deflection from Frank to reach her MMNA figure. Frank's patient-pay calculation, processed through the QIT:

$3,400 Frank's gross income (deposited into QIT each month)
−   $75 PNA (QIT distributes to Frank for personal use)
−   Medicare Part B premium (QIT distributes to SSA)
−   Medigap (QIT distributes to insurer, if applicable)
−   MMNA deflection to Hilda (QIT distributes to Hilda; capped by Frank's available income)
=   Patient-pay liability (QIT distributes to facility)

The QIT is the procedural plumbing; the substantive deduction-stack is identical to non-QIT cases. Frank keeps his $75 PNA AND deflects to Hilda, protecting her from impoverishment as a result of Frank's nursing-facility admission.

This is the federal Spousal Impoverishment doctrine working as designed in the Texas income-cap context, with the QIT serving as the eligibility vehicle that makes Frank's case workable despite his over-cap income.

The QIT (Miller Trust) and PNA: How They Interact

Texas's QIT requirement is a procedural complication that distinguishes Texas from medically-needy states like Pennsylvania and California, but does NOT change the substantive PNA mechanics. The QIT is the federally-authorized vehicle (under 42 USC § 1396p(d)(4)(B)) that allows over-cap applicants in income-cap states to qualify for institutional Medicaid by depositing excess income into the trust each month.

Critical PNA-QIT interaction points:

1. The QIT must be drafted, funded, and operational BEFORE Medicaid eligibility can begin. Texas does not allow retroactive QITs.

2. The QIT trustee distributes the PNA monthly. The $75 PNA flows from the QIT to the resident's facility resident-trust-fund account each month, not directly from the gross income stream.

3. The QIT trustee must follow the federal deduction-stack order. PNA → premiums → MMNA → patient-pay is the required sequence; deviating exposes the trustee to fiduciary liability.

4. The State of Texas must be the QIT residual beneficiary. Upon the resident's death, any remaining QIT balance (typically minimal, since QITs generally distribute the full month's deposit) goes to Texas Medicaid up to the amount Medicaid paid for the resident's care.

5. The QIT is irrevocable. Once established, it cannot be terminated until the resident's death or Medicaid termination. Trustees should factor this permanence into the initial setup.

6. QIT setup typically requires legal fees and ongoing trustee responsibilities (monthly deposits, monthly distributions, annual tax filing). The State Bar of Texas Elder Law Section maintains lawyer referrals.

The QIT does NOT change the $75 PNA figure. Whether the Texas resident is at $2,500/month income (no QIT needed) or $5,000/month income (QIT required), the PNA is $75/month for personal use.

STAR+PLUS HCBS and the Personal Needs Allowance

Texas's STAR+PLUS program is the managed-care delivery vehicle for long-term services and supports for adults age 21 and older with disabilities and seniors. Within STAR+PLUS, the HCBS waiver (under 42 USC § 1396n(c)) provides home and community-based services as alternatives to institutional Medicaid for individuals who would otherwise require nursing-facility level of care.

STAR+PLUS HCBS PNA mechanics: Residents in STAR+PLUS HCBS who reside in a Medicaid-covered residential setting (assisted-living facility, adult foster home, or other residential placement) are subject to the same patient-pay calculation as Institutional Medicaid residents, including the $75 PNA. STAR+PLUS HCBS residents in their own homes (not a Medicaid-covered residential setting) are not subject to PNA / patient-pay calculation, since they pay their own room-and-board out of their own income.

The MCOs administering STAR+PLUS handle the operational implementation of the PNA / patient-pay calculation for residential-setting members. Members or their families who have questions about the calculation should contact the MCO's case manager directly.

National PNA Comparison

The following table provides directional context for 2026 PNA figures in major peer states. For the exact current-year figure in any given state, verify against that state's Medicaid agency or current statute/regulation.

Texas's $75 places it firmly in the upper-mid tier, well above NY/PA/MI/CA and on parity with Connecticut and Ohio. The figure reflects sustained legislative attention to nursing-facility resident dignity within Texas's broader Medicaid framework.

10 Practical Tips for Texas Families

1. Set Up the Resident Trust Fund Account at the Facility on Admission. The PNA is automatically deposited each month into a facility-administered resident-trust-fund account. The resident or their representative payee may withdraw funds at any time during business hours. Most facilities provide quarterly statements.

2. Use the Full $75, Don't Bank It. Texas's $2,000 institutional Medicaid asset limit is among the lowest in the country. Banked PNA at $75/month accumulates: 27 months of unspent PNA = $2,025, which would exceed the asset cap and jeopardize Medicaid eligibility. Active monthly spending or quarterly distributions to family for the resident's benefit are critical.

3. Cellphone Service Connects Family Across Texas's Distances. Texas families are often geographically dispersed across the state's enormous footprint (Houston, Dallas, Austin, San Antonio, El Paso, Lubbock are major metros; many TX families have members in multiple). A modest monthly cellphone plan is one of the highest-value PNA expenditures.

4. Local Newspaper Subscriptions Carry Cultural Value. Texans who have read the Houston Chronicle, Dallas Morning News, San Antonio Express-News, or Fort Worth Star-Telegram for decades often experience the daily newspaper as a critical anchor of normalcy.

5. Salon and Barber Services Should Be Monthly. The facility's contracted barber/stylist typically charges a modest fee per haircut. A monthly haircut is dignity-preserving and within the $75 PNA.

6. Football Season Programming Matters. For Texans who follow Friday-night high-school football, college football (UT, A&M, Tech, TCU, etc.), or the Cowboys/Texans, modest spending on radio subscriptions, magazine subscriptions, or programming-related items contributes meaningfully to cultural connection during the fall season.

7. Family-Provided Cash Counts as Resources, Not Income. Family members may directly deposit additional money into the resident's personal account beyond the $75 PNA. These deposits ARE counted against the $2,000 asset limit. Time gifts to coincide with the resident's spending pattern.

8. Tobacco and Modest Vices Are PNA-Allowable. If your loved one smoked before admission, do not police their tobacco purchases (subject to facility smoke-free policy). Federal regulation specifically protects resident discretion over PNA spending choices.

9. QIT Residents: Verify Monthly PNA Distribution. If your loved one has a Miller Trust, the trustee must distribute the $75 PNA monthly to the resident's personal account. If the trustee misses a distribution, the resident loses access to the PNA for that month. Verify monthly distributions are working correctly via the QIT bank statements.

10. Verify the Facility Is Not Withholding PNA as "Miscellaneous Charges." Some facilities improperly bill resident-trust-fund accounts for items that should be facility-provided. Common improper charges: extra incontinence supplies (which the facility is required to provide), copays for Medicaid-covered drugs (which are Medicaid's responsibility), basic toiletries the facility is required to stock. Dispute these with the Texas Long-Term Care Ombudsman.

8 Common Pitfalls

1. Banked PNA Pushing Resources Over $2,000 Asset Limit. Texas's $2,000 institutional Medicaid asset limit is among the lowest in the country. A resident saving $75/month accumulates over $2,000 in 27 months, a real risk for residents who do not actively spend. Active monthly spending or quarterly family distributions prevent eligibility loss.

2. Co-Mingling Resident Funds With Facility Operating Funds. Federal regulation 42 CFR § 483.10 requires facilities to maintain separate resident-trust-fund accounts. A facility that co-mingles funds is in violation; report to TX HHSC or the Long-Term Care Ombudsman.

3. QIT Trustee Failing to Distribute the PNA. A Miller Trust trustee who fails to distribute the monthly $75 PNA to the resident's personal account is breaching fiduciary duty and depriving the resident of the federally-mandated dignity money. The resident or family should monitor monthly QIT distributions and report failures to the elder-law attorney who drafted the trust.

4. Treating QIT Funds as Family Money. The QIT is the resident's money flowing to allowable distributions. It is NOT a family asset. A trustee who diverts QIT funds to family members for non-resident purposes is committing trust fraud.

5. Facilities Holding Back PNA as "Miscellaneous Charges." Some Texas facilities improperly bill resident-trust-fund accounts for items that should be facility-provided. Dispute these.

6. Family Confiscating Money for Unrelated Purposes. Misuse by a representative payee or family member is a federal regulation violation and a Texas Penal Code issue (potential elder financial exploitation under § 32.55, Texas Penal Code). The Texas Long-Term Care Ombudsman, HHSC, and Adult Protective Services have authority.

7. Failure to Use the PNA Each Month. Cognitively impaired residents whose family does not visit may accumulate PNA without spending it, then face the asset-cap issue. Active monthly use for the resident's benefit is essential.

8. Confusing PNA With Other Income Components. SNAP benefits (suspended during NF residence; the facility provides meals), Veterans Aid & Attendance (paid directly to the resident and counted as income for Medicaid budgeting), and Medicare Part B premium are all SEPARATE from the PNA.

Where to Get Help

If you have questions about the Texas PNA, patient-pay calculation, QIT mechanics, or related Medicaid issues:

• Texas 2-1-1, 211 (or 1-877-541-7905), general Texas health and human services information including Medicaid eligibility and patient-pay questions.
• Texas Long-Term Care Ombudsman, 1-800-252-2412, resident-rights advocacy, facility-billing disputes, resident-trust-fund issues.
• Texas HHSC Medicaid Helpline, 1-800-252-8263, Medicaid policy and benefit questions.
• Texas STAR+PLUS, 1-877-782-6440, managed-care HCBS member services.
• AARP Texas, 1-866-227-7457, senior-policy advocacy and information.
• LeadingAge Texas, 1-512-829-2401, trade association of nonprofit senior-living operators.
• Texas Health Care Association (THCA), 1-512-458-1257, trade association of TX nursing facilities.
• State Bar of Texas Elder Law Section, 1-800-204-2222, lawyer referrals for QIT setup and complex patient-pay questions.

Learn More

• Medicaid Personal Needs Allowance Explained
• Texas Medicaid Overview
• Texas Medicaid Long-Term Care & Nursing Homes
• Texas STAR+PLUS Waiver Program
• Texas Medicaid Spend-Down
• How to Apply for Texas Medicaid

Find personalized help navigating 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.