Your mom moved into a nursing home in San Antonio after a stroke. Her savings are running low, and the business office has mentioned Medicaid. You've heard about income caps, trusts and a five-year look-back, and you aren't sure where to start or whether she'll qualify.
This guide walks through Texas's rules as written in the HHSC Medicaid for the Elderly and People with Disabilities (MEPD) Handbook and Chapter 358 of the Texas Administrative Code8. We don't list dollar figures here because they change, usually each January. Instead, we explain how each limit works and point you to the official HHSC tables. Medicaid rules are complex, so for decisions about property, trusts or gifts, talk with HHSC or a Texas elder law attorney.
Who can qualify in Texas
To get Medicaid in a Texas nursing facility, HHSC's summary says a person must5:
- Be 65 or older, or meet Social Security's definition of disability.
- Meet medical necessity criteria.
- Live in Texas and be a U.S. citizen or a noncitizen with qualifying status.
- Live in a Medicaid-contracted long-term care facility for at least 30 consecutive days.
- Meet the income and resource limits.
Only the applicant's own income counts. HHSC notes that the income of parents and spouses isn't considered when deciding eligibility5, though a spouse's resources are counted under special spousal rules described below.
The 30-consecutive-day rule
Texas can't approve nursing home Medicaid under the special income limit until your parent has lived in one or more Medicaid-certified facilities, such as a Medicare skilled nursing facility or a nursing facility, for at least 30 consecutive days91. The day of admission counts as day zero9. If the stay is shorter, different budget rules apply10.
You don't have to wait 30 days to apply. HHSC can start processing an application when it's received and hold it until the 30-day requirement is met9. A stay that begins as Medicare-covered rehab counts toward the 30 days. See when Medicare stops paying for a nursing home.
Medical necessity
Your parent must have an approved medical necessity determination showing they need nursing facility care1. Texas Medicaid & Healthcare Partnership (TMHP), the state's Medicaid claims administrator, decides medical necessity for residents of Medicaid-certified facilities1. For someone in a Medicare skilled nursing facility, Medicare's determination of need for care is accepted1.
In practice, the nursing home completes the assessment that supports this decision. Ask the business office or social worker whether it has been submitted and approved, since an application can't be approved without it.
The income limit
Texas uses a special income limit for nursing home Medicaid. It's set at 300 percent of the full individual Supplemental Security Income (SSI) benefit rate, and the limit for a couple is twice that23. Because SSI rates change each year, the dollar limit usually changes every January. You'll find the current figure in Appendix XII of the MEPD Handbook5.
Texas counts gross income, before deductions such as Medicare premiums or tax withholding5. Income includes Social Security, pensions, certain VA benefits, annuities, interest, dividends, rental income and other regular payments5. Income is counted under federal SSI rules10. If your parent's income is close to the limit, small cost-of-living increases can matter.
Over the income limit: Qualified Income Trusts
Many Texans have income above the special limit but far below what a nursing home costs. Federal law allows an income diversion trust for this situation, called a Qualified Income Trust (QIT) or Miller trust2. Income placed in a QIT the month it's received isn't counted when testing eligibility for nursing home or waiver services4.
HHSC's rules for a valid QIT include4:
- The trust must be irrevocable.
- It may hold only the person's income, not savings or other resources.
- The whole amount of each income source chosen must go in, during the month it's received.
- The State of Texas must be named to receive what remains at death, up to the amount Medicaid paid.
The resource limit
Countable resources must be at or below the limit for an individual or, for a married couple living together, the couple limit6. These limits are small and have stayed the same since 19896. See the current amounts in Section F-1300 and Appendix XII65. Resources are valued as of the first moment of the first day of each month, and being over the limit on that day makes a person ineligible for the whole month6.
Countable resources include bank accounts, CDs, stocks and bonds, IRAs, real estate other than the home, some life insurance, and extra vehicles5. HHSC lists these common exclusions5:
- A homestead in Texas that the person intends to return to.
- One vehicle, regardless of value.
- Life insurance with a small total face value per person.
- Burial funds up to a set amount, or more if placed in an irrevocable arrangement.
Learn how families legally reduce countable assets in Medicaid spend-down. To learn how the home is treated, see can a nursing home take your house.
When one spouse stays at home
Texas follows federal spousal impoverishment rules so the spouse at home, called the community spouse, isn't left without money1112. The couple's combined countable resources are reviewed when the spouse enters the nursing home, and the community spouse keeps a protected amount called the Spousal Protected Resource Amount (SPRA), which falls between a minimum and maximum that HHSC updates yearly115. The home, household goods, one car and burial funds are excluded from that calculation5.
Spouses may transfer resources between themselves without penalty13. A portion of the nursing home spouse's income can also go to the spouse at home if their own income is low5. See the Medicaid look-back period for how transfers to others are treated.
The five-year look-back and transfer penalties
When your parent applies, HHSC looks back 60 months from the later of the nursing home entry date or the application date for assets given away or sold for less than fair market value7. The penalty is based on the uncompensated value, the difference between what the asset was worth and what your parent received14.
Texas presumes that a transfer for less than fair market value was made to qualify for Medicaid. Your parent can rebut that with a written statement and documents showing the transfer was made only for some other purpose14. Gifts to grandchildren, paying a family member informally for care, or adding a child to a deed can all raise questions. See caregiver agreements with family.
What your parent pays each month
Once approved, most residents pay part of their income toward their care each month, sometimes called the co-payment or applied income. It equals your parent's total gross income minus a small personal needs allowance, and minus any amount set aside for a spouse or dependents at home5. Medicaid pays the rest of the nursing home's Medicaid rate. The current personal needs allowance is listed in Appendix XII5.
Common mistakes Texas families make
- Giving money away before applying. Gifts within the 60-month look-back can lead to a penalty period with no Medicaid coverage7.
- Opening a QIT but missing a deposit. Income must go into the trust during the month it's received, or your parent can be ineligible for that month4.
- Being over the resource limit on the first of the month. Resources are counted at the start of each month, so a balance over the limit on that day affects the whole month6.
- Putting savings into a QIT. A QIT may hold only income. Adding resources means it isn't a valid QIT4.
- Assuming a spouse must spend everything. The community spouse keeps a protected share of resources and may receive some income115.
- Ignoring renewal notices. Medicaid must be renewed. Watch the mail and respond by the deadline so coverage doesn't lapse.
If something goes wrong, you can ask for a fair hearing to challenge a denial or a penalty. The notice from HHSC explains how and by when.
How to apply in Texas
- Confirm the facility accepts Medicaid. Your parent must be in a Medicaid-contracted facility5. See how to choose a nursing home.
- Gather documents. Identification, proof of income, bank and investment statements, life insurance and burial policies, deeds and vehicle titles.
- Apply. Apply online at YourTexasBenefits.com, by mail, or with help from the nursing home's business office15.
- Respond quickly. HHSC may ask for more information. Missing a deadline can delay or deny the application.
- Watch the 30-day mark and medical necessity. Both must be in place before approval1.
- Keep records. Save copies of everything and note who you spoke with and when.
For general steps that apply in every state, see how to apply for Medicaid for an elderly parent.
Texas estate recovery
Texas, like every state, runs a Medicaid Estate Recovery Program (MERP). If your parent received Medicaid long-term services, the state may ask to be repaid from their estate after death, but never more than it paid16. HHSC says it won't seek recovery when there is a surviving spouse, a child under 21, a child of any age who is blind or permanently disabled, or an unmarried adult child who lived in the home full time for at least a year before death, and it also exempts small estates and cases of undue hardship16. See Medicaid estate recovery.
Getting help
Call HHSC at 2-1-1 for questions, or ask the nursing home's business office for help with forms. The long-term care ombudsman can help if a nursing home pressures your parent to leave while an application is pending. See nursing home eviction. For a broader look at Texas care costs, see how to pay for assisted living in Texas and how to pay for a nursing home. For another big state, see Florida Medicaid nursing home eligibility.
