Yes, Medicaid does pay for nursing homes in Texas, and it covers the majority of long-term nursing facility stays in the state. To qualify in 2026, a single applicant generally needs monthly income at or below $2,982, countable assets of no more than $2,000, and a documented medical need for nursing-level care.1Texas Health and Human Services. Appendix VIII, Income and Resource Limits The numbers are the easy part. The rules behind them, especially for married couples and anyone whose income runs a little over the cap, are where most families get tangled.
What Nursing Home Medicaid Actually Pays For
Once a Texas resident is approved under the Nursing Facility program, the facility is responsible for the total medical, social, and psychological needs of that resident.2Provider Finance Department. Nursing Facility (NF) That means room and board, round-the-clock nursing care, help with daily activities such as bathing and dressing, prescription and over-the-counter medications, medical supplies and equipment, and personal-needs items. Physical, occupational, and speech therapy are covered when medically necessary, along with social services.
The Medical and Residency Gate
Before Texas looks at your bank accounts, you have to clear two baseline requirements. You must be a Texas resident, and a medical assessment must confirm that you need a “nursing facility level of care.” That standard means your condition requires skilled nursing and supervision that can only be provided in an institutional setting, not simply help around the house. HHSC uses this assessment to confirm that nursing home placement is medically appropriate, not just preferred.
Income and Asset Limits for 2026
Texas is an “income cap” state. For 2026, a single applicant’s countable monthly income cannot exceed $2,982, which equals 300 percent of the federal Supplemental Security Income benefit of $994 per month.1Texas Health and Human Services. Appendix VIII, Income and Resource Limits3Social Security Administration. How Much You Could Get From SSI Countable assets must stay at or below $2,000.
Not everything you own counts toward that $2,000 figure. These are generally excluded:
- Your primary residence, as long as your equity stays below the state’s limit (set at $730,000 for 2025 and adjusted annually) and you intend to return home or your spouse or dependent child lives there.4Texas Health and Human Services. F-3600, Substantial Home Equity
- One vehicle, regardless of value.
- Personal belongings and household goods.
- Certain burial funds and prepaid burial arrangements.
Bank accounts, stocks, bonds, CDs, and similar financial assets do count. Retirement accounts such as IRAs and 401(k)s are typically treated as countable assets in Texas, which catches many families off guard. An elder law attorney may suggest converting a retirement account into a Medicaid-compliant annuity, turning that lump sum into an income stream with no remaining cash value.
When Income Exceeds the Cap: the Miller Trust
If your monthly income runs even one dollar over $2,982, you don’t qualify under the standard rules. Texas does not use a “medically needy” spend-down for institutional care the way some other states do. The fix is a Qualified Income Trust, usually called a Miller Trust.
A Miller Trust is an irrevocable trust built for this exact problem. Income that pushes you over the cap is deposited into the trust account each month, and the trustee pays it out in a specific order set by state rules.5Texas Health and Human Services. Appendix XXXVI, QITs and MEPD Information A few features are non-negotiable:
- Only income goes in. Pension checks, Social Security, and similar sources are allowed. You cannot deposit savings or other resources.
- The trust must be irrevocable.
- It must include a state payback clause. When the beneficiary dies, any remaining funds go to Texas up to the total Medicaid paid out.
- Deposits have to happen the same month income is received, and distributions must be made by the end of the following month.
- The beneficiary should not serve as trustee.
From the trust, the trustee pays a personal needs allowance, any court-ordered guardianship fees, a spousal maintenance allowance if applicable, and sends the remainder toward the cost of care. Setting one up usually requires an attorney, with fees running from a few hundred to a couple thousand dollars. Given that private-pay nursing home care in Texas can run $4,000 or more per month, the trust pays for itself almost immediately.
Protections for a Spouse Still at Home
When one spouse enters a nursing home and the other stays in the community, federal and state rules keep the at-home spouse from being wiped out. Two protections do most of the work.
Community Spouse Resource Allowance
The at-home spouse can keep a share of the couple’s combined countable assets. For 2026, that protected amount ranges from a minimum of $32,532 to a maximum of $162,660, depending on the couple’s total countable assets at the time of application.6Centers for Medicare & Medicaid Services. 2026 SSI and Spousal Impoverishment Standards Assets above the allowance generally must be spent down before the nursing home spouse qualifies.
Minimum Monthly Maintenance Needs Allowance
If the at-home spouse’s own income falls below a certain floor, part of the nursing home spouse’s income can be redirected to make up the gap. For 2026, Texas sets the maximum allowance at $4,066.50 per month.7Texas Health and Human Services. MEPD and TWH Bulletin 25-24 The at-home spouse doesn’t get the full amount automatically; the allowance only covers the shortfall between their own income and the threshold.
The Five-Year Look-Back and Transfer Penalties
Texas enforces a 60-month look-back on asset transfers. When you apply, the state reviews the previous five years of financial activity. Gifts or transfers made for less than fair market value during that window can trigger a penalty period during which Medicaid will not pay for your nursing home care.8Texas Health and Human Services. I-2100, Look-Back Policy
The penalty is calculated by dividing the transferred amount by the state’s average daily private-pay nursing facility rate. At the published Texas rate of $117.08 per day, a $50,000 gift creates a penalty of roughly 427 days, and a $100,000 transfer runs about 854 days of ineligibility.8Texas Health and Human Services. I-2100, Look-Back Policy During those penalty days, you pay the full cost yourself. Well-intentioned gifts to children or grandchildren are where families most often get burned.
Transfers That Don’t Count
Some transfers are exempt. You can transfer your home without penalty to a spouse, a child under 21, or a blind or permanently disabled child. A transfer to an adult child who lived in your home and provided hands-on care for at least two years immediately before your nursing home admission may also qualify, provided that care demonstrably delayed the need for institutional placement. This “caregiver child exemption” needs solid documentation: proof of residency, evidence of the care provided, and ideally a physician’s statement. Transfers of any asset between spouses are generally exempt as well.
What You Still Pay After Approval
Approval doesn’t make nursing home care entirely free. Once you’re on Nursing Home Medicaid, nearly all of your monthly income goes toward the cost of your care, sometimes called your “patient liability” or “cost share.” You keep a small personal needs allowance each month for things like clothing and toiletries. If a spouse in the community needs income support under the maintenance allowance rules, some of your income is redirected to them first. Medicaid then covers the difference between what you pay and the facility’s Medicaid reimbursement rate.
Options Other Than a Nursing Home
Institutional care isn’t the only Medicaid-funded path. Texas runs the STAR+PLUS program, which delivers long-term care in home and community-based settings through managed care. Federal law lets states create home and community-based services waivers so that people who would otherwise qualify for a nursing facility can receive services at home instead.9Medicaid.gov. Home and Community-Based Services 1915(c) You still have to meet the nursing facility level of care requirement and the same financial rules, but services come to you.
Community-based programs can include attendant care, home modifications, respite for family caregivers, and adult day services. The catch is that waiver programs cap enrollment, and Texas waitlists can be long. Exploring these options early gives you a real chance at a slot before a nursing home becomes the only option left.
Estate Recovery After Death
After a Medicaid nursing home recipient dies, Texas has the right to seek reimbursement from their estate for the care provided. Every state is required to run a Medicaid Estate Recovery Program, and Texas enforces its program actively.10Texas Health and Human Services. Your Guide to the Medicaid Estate Recovery Program It applies only to long-term care services received after age 55, and only when the person first applied for those services after March 1, 2005.
Recoverable costs include nursing facility care, certain hospital and prescription drug costs, and various community-based waiver services such as Community Based Alternatives, Community Living Assistance and Support Services, and STAR+PLUS long-term care. The state can pursue probate assets and, in some cases, non-probate assets that pass outside a will.
Recovery is blocked entirely when any of the following survive the recipient:
- A living spouse
- A child under 21
- A child of any age who is blind or permanently and totally disabled under Social Security standards
Beyond those automatic exemptions, Texas may grant an undue hardship waiver if recovery would deprive heirs of necessities like food, shelter, or medical care, or if the estate property is a family business, farm, or ranch that has been the heirs’ primary income source for at least 12 months before the recipient’s death. Hardship waiver applications are included with the Notice of Intent to File a Claim that MERP sends to the estate.11Texas Health and Human Services. Medicaid Estate Recovery Program FAQs For families with property to protect, addressing MERP during planning is far more effective than trying to handle it after a death.
How to Apply
Applications for Texas Medicaid nursing home benefits go through the Texas Health and Human Services Commission. Gather proof of identity, Texas residency, every income source, and a full accounting of assets. Medical records documenting the need for nursing facility care matter just as much.
You can submit online at YourTexasBenefits.com, download and mail a paper form, or apply in person at an HHSC office.12Your Texas Benefits. Get a Paper Form After HHSC has your file, expect follow-up requests for documentation. A formal decision notice arrives once the review is complete.
One detail worth knowing: Medicaid eligibility can apply retroactively for up to three months before your application date, as long as you met all the criteria during that period. If your relative entered a nursing home and you didn’t apply immediately, those earlier months of care may still be covered. File promptly anyway, because every month beyond the retroactive window is private-pay money you won’t get back.