When one spouse enters a nursing facility and applies for Texas Medicaid, federal law steps in to prevent the other spouse from being left with almost nothing. The rules set a minimum and a maximum for how much the at-home spouse can keep in assets and income. In Texas in 2026, that protected asset amount ranges from $32,532 to $162,660.
Why Texas Medicaid Spousal Impoverishment Rules Exist
Before Congress passed the Medicare Catastrophic Coverage Act of 1988, a spouse entering a nursing home on Medicaid could leave the at-home partner with almost nothing. Both spouses' assets were counted together, and Medicaid required the couple to spend nearly all of them before the institutionalized spouse could qualify. The community spouse sometimes ended up on public assistance.
The Spousal Impoverishment provisions, now codified at 42 USC § 1396r-5, changed that. They set protected minimums for the at-home spouse's assets and income, and they separated the two spouses' finances for Medicaid purposes once the institutionalized spouse enters long-term care.
Texas follows federal law on spousal impoverishment. Texas HHSC applies these rules when processing Medicaid applications for nursing-facility and HCBS waiver programs.
Step 1: The Snapshot
When the institutionalized spouse first enters continuous care (hospital or nursing facility for at least 30 days), Texas takes a financial snapshot: a count of all countable assets held by both spouses combined. This snapshot date determines the base amount the community spouse will be allowed to keep.
Countable assets include bank accounts, CDs, stocks, bonds, and most other financial assets. The primary home is exempt from the snapshot if the community spouse lives there, as is one vehicle, term life insurance, and personal property.
Step 2: The Community Spouse Resource Allowance (CSRA)
After the snapshot, Texas calculates the CSRA:
- Take 50% of the combined countable assets as of the snapshot date.
- If that 50% figure falls below $32,532, the community spouse keeps $32,532 (the federal floor).
- If that 50% figure exceeds $162,660, the community spouse keeps $162,660 (the federal ceiling).
- If that 50% figure falls between $32,532 and $162,660, the community spouse keeps exactly that 50% figure.
The remaining countable assets (after the CSRA is set aside) must be spent down to $2,000 before the institutionalized spouse qualifies for Medicaid.
Worked example #1: Suppose a couple has $120,000 in combined countable assets at the snapshot. Half is $60,000. That falls within the CSRA range, so the community spouse keeps $60,000. The institutionalized spouse must spend down the remaining $60,000 to $2,000 (so $58,000 must be spent) before Medicaid coverage begins.
Worked example #2: Suppose the couple has $50,000 in combined countable assets. Half is $25,000, which is below the $32,532 floor. The community spouse keeps the floor amount: $32,532. The institutionalized spouse must spend down the remaining $17,468 to $2,000 (so about $15,468 must be spent).
The figures above are hypothetical and shown only to illustrate how the calculation works. They are not a real case and not a prediction of your own result.
Step 3: The Monthly Maintenance Needs Allowance (MMNA)
After the institutionalized spouse qualifies for Medicaid, a separate protection preserves the community spouse's monthly income.
The institutionalized spouse's income normally goes to the nursing facility as the "patient liability" (after deducting Medicare premiums, health insurance, and a $75 personal needs allowance). But if the community spouse's income falls below the MMNA, the institutionalized spouse can divert income to the community spouse to close that gap.
Texas MMNA for 2026:
- Minimum: $2,643.75/month (the federal base minimum under 42 USC § 1396r-5)
- Maximum: $4,066.50/month (after the excess shelter allowance is added)
The excess shelter allowance increases the MMNA when the community spouse's housing costs (rent, mortgage, property taxes, insurance, utilities, and a standardized maintenance allowance) exceed a set shelter standard. An elder-law attorney or HHSC worker can calculate this for the community spouse's specific housing situation.
If the community spouse's own income already meets or exceeds the MMNA, no income diversion occurs. If their income falls short, the institutionalized spouse redirects income to cover the difference before the rest goes to the facility.
Exempt Assets: What the Community Spouse Keeps Regardless
The following assets are never counted in the CSRA calculation:
- Primary home: Exempt if the community spouse lives there (or intends to return). Home equity up to $752,000 is also the eligibility-stage exemption for the institutionalized spouse.
- One vehicle: The household's primary car.
- Household goods and personal effects.
- Term life insurance with no cash value.
- Irrevocable prepaid burial contracts within reasonable limits.
These exemptions mean the community spouse's ability to keep the family home is strong. The most common practical concern is liquid financial assets (bank accounts, investments) and what happens to them once spent down.
Planning Strategies
Once assets are spent down to the CSRA, there are legitimate ways to preserve what remains:
Spend down on non-countable items. Before the institutionalized spouse applies, the couple can spend countable assets on exempt ones: prepaying funeral expenses via an irrevocable contract, paying off the home mortgage, purchasing an additional vehicle, or making home repairs.
Medicaid-compliant annuity (SPIA). A community spouse can convert countable assets into a Medicaid-compliant Single Premium Immediate Annuity, which pays income to the community spouse over their actuarial life expectancy. Because the annuity pays income rather than holding a lump sum, the converted amount generally becomes non-countable for the institutionalized spouse's Medicaid eligibility.
Seek a fair-hearing increase in the CSRA or MMNA. Under 42 USC § 1396r-5(e), either spouse may request a fair hearing to seek an increased CSRA or MMNA if the community spouse would be unable to meet their monthly maintenance needs without it. This is a formal hearing process and benefits from legal representation.
| Rule | Amount | Notes |
|---|---|---|
| CSRA minimum | $32,532 | Community spouse keeps at least this much |
| CSRA maximum | $162,660 | Community spouse cannot keep more than this |
| CSRA calculation | 50% of combined assets | Subject to floor and ceiling |
| MMNA minimum | $2,643.75/month | Base federal minimum |
| MMNA maximum | $4,066.50/month | After excess shelter allowance |
| Institutionalized spouse asset limit | $2,000 | After CSRA is set aside |
| Personal Needs Allowance | $75/month | Kept by nursing-home resident |
| Home equity exemption | $752,000 | Home exempt if community spouse resides there |
Frequently Asked Questions
Yes. The primary home is exempt from the CSRA calculation and from the institutionalized spouse's asset test as long as the community spouse lives there. Texas MERP (estate recovery) can only seek repayment from probate assets after both spouses have died. As long as one spouse is alive and living in the home, recovery is deferred.
After deducting Medicare premiums, health insurance costs, the $75 personal needs allowance, and any MMNA income transfer to the community spouse, the institutionalized spouse's remaining income goes to the nursing facility as the patient liability. Medicaid covers the gap between the patient liability and the facility's Medicaid rate.
If the community spouse earns more than the MMNA on their own, no income transfer from the institutionalized spouse is needed. All of the institutionalized spouse's income (after PNA and insurance deductions) goes to the facility.
Yes. Texas is an income-cap state. If the institutionalized spouse's gross income exceeds $2,982/month (300% of the SSI Federal Benefit Rate in 2026), they must establish a Qualified Income Trust (also called a Miller Trust) to deposit the excess income. Without the QIT, they cannot qualify for nursing-home Medicaid even if assets are within limits.
Texas does not recognize spousal refusal (the strategy used primarily in New York and a handful of other states). Texas follows standard 42 USC § 1396r-5 rules, which require the couple's combined assets to be counted at the snapshot date.
Learn More
- Texas Medicaid Eligibility and Income Limits
- How to Apply for Medicaid in Texas
- Medicaid Planning Strategies
Find personalized help calculating how Texas Medicaid spousal impoverishment rules apply to your family's assets and income 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.