Does Medicaid Pay for Nursing Homes in Texas?

Yes, Medicaid pays for nursing homes in Texas, and it covers most 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.¹ The numbers are the easy part. The rules around trusts, spouses, past gifts, and estate recovery are where families get tripped up.

What the Coverage Includes

Once you’re approved for the Texas Nursing Facility program, the facility must provide for your total medical, social, and psychological needs. That means room and board, round-the-clock nursing care, help with daily activities like bathing and dressing, prescription and over-the-counter drugs, medical supplies, and personal-needs items.² Physical, occupational, and speech therapy are covered when medically necessary, along with social services.

Medical and Residency Requirements

Before finances come into play, you have to clear two thresholds. You must be a Texas resident, and a medical assessment must show you need a “nursing facility level of care.” That means your condition requires skilled nursing and supervision that can only be delivered in an institutional setting, not just help around the house. HHSC uses the assessment to confirm nursing home placement is medically appropriate rather than a preference.

2026 Income and Asset Limits

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.¹³ Countable assets must stay at or below $2,000.

Not everything you own counts against that $2,000 limit. Generally excluded:

Your primary residence, as long as your equity is below the state’s ceiling ($730,000 for 2025, adjusted annually) and you intend to return home, or a spouse or dependent child lives there.⁴
One vehicle, regardless of value.
Personal belongings and household goods.
Certain burial funds and prepaid burial arrangements.

Bank accounts, stocks, bonds, CDs, and other liquid financial holdings count. So do IRAs and 401(k)s in most Texas cases, which catches many families by surprise. An elder law attorney may recommend converting a retirement account into a Medicaid-compliant annuity, turning the lump sum into an income stream with no remaining cash value.

Over the Income Cap? The Miller Trust Fix

If your monthly income is even a dollar over $2,982, you don’t qualify under standard rules. Texas doesn’t offer a “medically needy” spend-down for institutional care the way some states do. The workaround is a Qualified Income Trust, better known as a Miller Trust.

A Miller Trust is an irrevocable trust built for this exact problem. Income that pushes you over the cap goes into the trust account each month, and the trustee distributes those funds in a specific order set by state rules.⁵ For the trust to work:

Only income can go in. Pension, Social Security, and similar sources. Savings and other resources can’t be deposited.⁵
The trust must be irrevocable, and it can’t be revoked even by court action.
When the beneficiary dies, remaining funds go to the state up to the total amount of Medicaid assistance paid.
Income must go into the trust the same month it’s received, and the trustee must distribute by the last day of the following month.
The beneficiary shouldn’t serve as trustee.

From the trust, the trustee pays a monthly personal needs allowance to the resident, any court-ordered guardianship fees, a spousal allowance if applicable, and then the balance toward the cost of care.⁵ Setting up a Miller Trust typically requires an attorney; fees range from a few hundred to a couple thousand dollars. With Texas nursing home care running $4,000 or more per month out of pocket, the trust pays for itself almost immediately.

Protections for the Spouse Who Stays 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 matter most.

Community Spouse Resource Allowance

The at-home spouse can keep a portion of the couple’s combined countable assets. For 2026, the protected amount runs from a minimum of $32,532 to a maximum of $162,660, based on the couple’s total countable assets at the time of application.⁶ 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 the state’s floor, they can receive part of the nursing home spouse’s income to close the gap. Texas sets the 2026 maximum at $4,066.50 per month.⁷ The allowance covers only the difference between the at-home spouse’s income and that threshold, not the full amount automatically.

The Five-Year Look-Back on Gifts and Transfers

Texas reviews the previous 60 months of financial activity when you apply. Any gifts or transfers made for less than fair market value during that window can trigger a penalty period during which Medicaid won’t pay for your nursing home care.⁸

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 roughly 427 days of ineligibility, and a $100,000 transfer produces about 854 days.⁸ During the penalty, you pay the full cost yourself. Well-intentioned gifts to children or grandchildren are where families get burned.

Transfers That Don’t Count Against You

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 right before your nursing home admission may also be exempt, provided that care demonstrably delayed the need for institutional placement. This “caregiver child exemption” requires solid documentation: proof of residency, evidence of the care provided, and ideally a physician’s statement confirming the care prevented earlier institutionalization. Transfers between spouses are generally exempt as well.

How to Apply

Applications go through the Texas Health and Human Services Commission. Gather proof of identity, Texas residency, all income sources, and a full accounting of assets. Medical records showing the need for nursing facility care are just as important.

You can apply online at YourTexasBenefits.com, download and mail a paper form, or apply in person at an HHSC office.⁹ Expect follow-up requests for verification. HHSC issues a formal decision notice when the review is done.

One detail worth knowing: eligibility can apply retroactively for up to three months before your application date if you met all criteria during that period. If a loved one entered a nursing home and you didn’t apply right away, those earlier months may still be covered. Every month of delay past the retroactive window is a month of private-pay costs you won’t recover.

What You Still Pay After Approval

Approval doesn’t make nursing home care free. Almost all of your monthly income goes toward the cost of your care, an amount called your “patient liability” or “cost share.” You keep a small personal needs allowance for things like clothing and toiletries. If your community spouse’s income falls below the maintenance allowance, part of your income is redirected to them before the facility gets its share. Medicaid then pays the difference between what you contribute and the facility’s Medicaid reimbursement rate.

Home-Based Alternatives

A nursing home isn’t the only Medicaid-funded option. Texas runs STAR+PLUS, which delivers long-term care in home and community-based settings through a managed care model. Federal law lets states create waivers so people who would otherwise qualify for institutional care can receive services at home instead.¹⁰ The medical and financial criteria are the same; services are delivered where you live.

These programs can include attendant care, home modifications, respite for family caregivers, and adult day services. The catch is that waivers cap enrollment, and Texas waitlists can be long. If institutional care is on the horizon, exploring these alternatives early gives you the best chance at a slot before a nursing home is the only viable option.

Estate Recovery After Death

After a Medicaid nursing home recipient dies, Texas has the right to seek reimbursement from the estate for the cost of care. Every state must operate a Medicaid Estate Recovery Program, and Texas enforces its program actively.¹¹ It applies only to long-term care services received after age 55, and only if the person first applied for those services after March 1, 2005.

Recoverable costs include nursing facility care, certain hospital and prescription drug costs, and community-based waiver services.¹¹ The state can pursue probate assets and, in some cases, non-probate assets.

Recovery is blocked entirely if 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 standards¹¹

Beyond those automatic exemptions, the state 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.¹¹ Hardship waiver applications come with the Notice of Intent to File a Claim that MERP sends to the estate.¹² If your family owns property you want to protect, understanding MERP before applying is far more effective than trying to address it afterward.

1
Texas Health and Human Services. Appendix VIII, Income and Resource Limits
2
Provider Finance Department. Nursing Facility (NF)
3
Social Security Administration. How Much You Could Get From SSI
4
Texas Health and Human Services. F-3600, Substantial Home Equity
5
Texas Health and Human Services. Appendix XXXVI, QITs and MEPD Information
6
Centers for Medicare & Medicaid Services. 2026 SSI and Spousal Impoverishment Standards
7
Texas Health and Human Services. MEPD and TWH Bulletin 25-24
8
Texas Health and Human Services. I-2100, Look-Back Policy
9
Your Texas Benefits. Get a Paper Form
10
Medicaid.gov. Home and Community-Based Services 1915(c)
11
Texas Health and Human Services. Your Guide to the Medicaid Estate Recovery Program
12
Texas Health and Human Services. Medicaid Estate Recovery Program FAQs