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.1 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 Is the Texas Medicaid Personal Needs Allowance?
• What Can the Personal Needs Allowance Be Spent On?
• What It Cannot Be Spent On
• The Patient-Pay Calculation
• Worked Example: A Single Resident
• Worked Example: A Married Resident and MMNA Deflection
• The QIT (Miller Trust) and PNA: How They Interact
• STAR+PLUS HCBS and the Texas Medicaid Personal Needs Allowance
• Practical Tips for Texas Families
• Common Pitfalls to Avoid
• Where to Get Help
• Frequently Asked Questions
• Learn More

The 60-Second Version

Beyond the at-a-glance figures above, here is how the money actually moves:

• Each month, the resident's gross income is reduced by the $75 PNA first, then by health-insurance premiums (Medicare Part B, Medigap), then by any MMNA deflection to a community spouse, then by allowable medical expenses. Whatever is left is the "patient-pay" the resident owes the facility, and Medicaid covers the rest of the cost of care.
• Texas Health and Human Services Commission (HHSC) sets the patient-pay calculation; the facility or STAR+PLUS managed-care organization (MCO) carries it out.
• Allowable uses of the PNA include clothing, hygiene products, phone service, haircuts, newspapers, small gifts to family, and other personal items.
• A married resident keeps the $75 PNA and can also deflect income to the community spouse under the federal MMNA rules, up to a 2026 maximum of $4,066.50/month via income-first methodology.4

What Is the Texas Medicaid Personal Needs Allowance?

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.2

But federal law also preserves a small monthly sum so that Medicaid long-term-care residents can meet personal needs the facility does not cover. 42 USC § 1396a(q) sets a $30/month federal floor for the PNA and lets states set a higher figure. Texas sets its PNA at $75/month, well above the federal floor.1

The Texas figure is meant to give nursing-facility and HCBS residents enough disposable income for clothing, communication, and other personal expenses while nearly all of their remaining income goes to the cost of care.

What Can the Texas Personal Needs Allowance 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 bars facilities from steering or restricting spending decisions for non-allowable purposes.

Common allowable uses include:

• Personal care items: toothpaste, deodorant, lotion, shampoo, shaving supplies, denture-care products, hearing-aid batteries, replacement reading glasses, and incontinence supplies beyond what the facility provides. (Medicaid-covered prescription drugs and durable medical equipment do NOT come from the PNA.)
• Communication: cellphone or landline service, prepaid phone cards, postage, greeting cards, and internet service for a personal device to stay in touch with family.
• Clothing: replacement clothing, undergarments, socks, slippers, sweaters, hats, and basic shoes (facilities are typically air-conditioned year-round, so residents often need extra layers).
• Entertainment and reading: newspaper and magazine subscriptions, paperback books, puzzles, hobby supplies, religious or devotional materials, a small TV, and headphones.
• Social and family: small gifts to family (within Medicaid gift-rule limits), photographs and frames, and modest contributions to family events.
• Comfort and dignity: haircuts and salon services from the facility's contracted barber or stylist, manicures, and allowed personal comfort items such as a preferred pillow or robe.
• Tobacco and other personal discretionary items: for residents who used them at admission, cigarettes or e-cigarettes (subject to facility policy) and modest beer or wine (where the facility permits and the physician approves).

The PNA is the resident's money for the resident's own use. The resident decides how to spend it; family and facility staff support those choices rather than override 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.1

The Patient-Pay Calculation

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 $2,705.00 minimum to $4,066.50 maximum).4 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.1

Worked Example: A Single Resident

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 Social Security retirement benefit and a modest teaching pension leave her total gross income below the 300% SSI FBR special income limit ($2,982/month in 2026), so she does NOT need a Qualified Income Trust.2 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. Her monthly patient-pay calculation looks like this (dollar amounts are illustrative):

Gross monthly 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 Texas Medicaid covers the difference between her contracted Medicaid daily rate and her patient-pay.

Eleanor's $75 PNA is deposited monthly into her resident-trust-fund account at the facility.1 She spends most of it each month on cellphone service, a newspaper subscription, and a monthly haircut, and saves a little toward holiday gifts for her grandchildren. Her social worker reviews her resident-trust-fund balance quarterly so she does not accumulate past Texas's $2,000 institutional Medicaid asset limit, a real risk when unspent PNA builds up.3

Worked Example: A Married Resident and 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 ($2,982/month in 2026), so he must establish a Qualified Income Trust (Miller Trust) before Medicaid eligibility can begin.2 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.

Hilda, who lives on her own Social Security and has shelter costs that push her toward the MMNA range, needs some of Frank's income deflected to her to avoid impoverishment. Frank's patient-pay calculation, processed through the QIT, runs the same deduction stack (dollar amounts are illustrative):

Frank's gross income (deposited into the QIT each month)
−   $75 PNA (QIT distributes to Frank for personal use)
−   Medicare Part B premium (QIT distributes to SSA)
−   Medigap premium (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 his nursing-facility admission.1 This is the federal spousal-impoverishment protection working as designed in Texas's 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.1

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 resident's income is just over the special income limit or far above it, the PNA remains $75/month for personal use.1

STAR+PLUS HCBS and the Texas Medicaid 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 live in a Medicaid-covered residential setting (assisted-living facility, adult foster home, or other residential placement) go through a patient-pay calculation like an Institutional Medicaid resident, but the allowance itself is not $75. Texas's MEPD budget reference chart sets the personal needs allowance by setting: $75 for a nursing facility recipient, $85 for a recipient in assisted living or foster care, and $2,901 for an HCBS waiver recipient.5 So the $75 figure in this guide is the nursing facility number and should not be carried into an assisted-living or waiver budget.1 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.

Texas sets its PNA at $75/month, above the federal floor of $30/month.1 Because each state's PNA is set by its own statute or rule and figures change over time, always confirm another state's current figure with that state's Medicaid agency before relying on it.

Practical Tips for Texas Families

1. Set up the resident trust fund account on admission. The PNA is deposited each month into a facility-administered resident-trust-fund account. The resident or their representative payee may withdraw funds during business hours, and most facilities provide quarterly statements.

2. Use the full $75; don't let it bank up.1 Because Texas's $2,000 institutional asset limit is so low, unspent PNA accumulating month after month can eventually push a resident over the cap and jeopardize eligibility. Active monthly spending or quarterly distributions to family for the resident's benefit prevent that.3

3. Cellphone service keeps family connected. Texas families are often spread across the state, so a modest monthly cellphone plan is one of the highest-value PNA expenditures.

4. A monthly haircut is worth budgeting for. The facility's contracted barber or stylist typically charges a modest fee; a monthly appointment is dignity-preserving and fits within the $75 PNA.1

5. Family-provided cash counts as a resource, not income. Money family members deposit into the resident's personal account beyond the $75 PNA IS counted against the $2,000 asset limit, so time gifts to coincide with the resident's spending.1,3

6. QIT residents: verify the monthly PNA distribution. If your loved one has a Miller Trust, the trustee must distribute the $75 PNA to the resident's personal account each month.1 If a distribution is missed, the resident loses access to the PNA for that month, so check the QIT bank statements.

7. Watch for PNA withheld as "miscellaneous charges." Some facilities improperly bill resident-trust-fund accounts for items they are required to provide, such as extra incontinence supplies, copays for Medicaid-covered drugs, or basic toiletries. Dispute these with the Texas Long-Term Care Ombudsman.

Common Pitfalls to Avoid

1. Letting banked PNA push resources over the $2,000 asset limit. This is the single most common problem: a resident whose family does not visit, often someone cognitively impaired, accumulates unspent PNA month after month until it crosses Texas's $2,000 institutional asset limit and threatens eligibility. Active monthly use or quarterly family distributions for the resident's benefit prevent it.3

2. Co-mingling resident funds with facility operating funds. Federal regulation 42 CFR § 483.10 requires facilities to keep separate resident-trust-fund accounts. A facility that co-mingles funds is in violation; report it to TX HHSC or the Long-Term Care Ombudsman.

3. A QIT trustee failing to distribute the PNA. A Miller Trust trustee who does not distribute the monthly $75 PNA to the resident's personal account is breaching fiduciary duty.1 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 holds the resident's money for 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. Misusing the resident's money. Misuse by a representative payee or family member can be elder financial exploitation under § 32.55 of the Texas Penal Code. The Texas Long-Term Care Ombudsman, HHSC, and Adult Protective Services all have authority to intervene.

6. Confusing the PNA with other income components. SNAP benefits (suspended during nursing-facility residence, since the facility provides meals), Veterans Aid & Attendance (paid to the resident and counted as income for Medicaid budgeting), and the Medicare Part B premium are all separate from the PNA.

Where to Get Help

If you have questions about the Texas PNA, the patient-pay calculation, or QIT mechanics, start with these resources.

Learn More

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.