Texas Medicaid Income & Asset Limits for Nursing Homes & In-Home Long Term Care

Last updated: January 11, 2023

 

Texas Medicaid Long-Term Care Definition

Medicaid is a health care program for low-income individuals of all ages. While there many different coverage groups, this page is focused on long-term care Medicaid eligibility for elderly Texas residents, aged 65 and over. In addition to nursing home care, assisted living services, and adult foster care services, Texas Medicaid pays for many non-medical support services that help frail seniors remain living in their homes. There are three categories of Medicaid long-term care programs for which senior Texans may be eligible.

1) Institutional / Nursing Home Medicaid – This is an entitlement program; anyone who is eligible will receive assistance. Benefits are provided only in nursing homes.

2) Medicaid Waivers / Home and Community Based Services – This is not an entitlement program; the number of participants are limited and waiting lists (interest lists) may exist. Intended to delay and prevent nursing home care, benefits are provided at home, adult day care, adult foster care home, or in assisted living. More about Medicaid Waivers.

3) Regular Medicaid / Medicaid for the Elderly and People with Disabilities (MEPD) – This is an entitlement program; persons who meet the eligibility requirements are guaranteed program benefits. Various long-term care benefits, such as personal care assistance or adult day care, may be available.

Medicaid is jointly funded by the state and federal government, but is administered by the state under federally set parameters. Texas Health and Human Services is the administering agency. Most Medicaid plans in Texas are provided by Managed Care Organizations (MCOs). The managed care program for the elderly and disabled is called STAR+PLUS and the program though which long-term home and community based services (HCBS) are provided is STAR+PLUS HCBS. More on Medicaid Managed Long-Term Care.

  The American Council on Aging now offers a free, quick and easy Medicaid Eligibility Test for seniors.

 

Income & Asset Limits for Eligibility

The three categories of Medicaid long-term care programs have varying eligibility requirements. Further complicating eligibility is that the financial criteria changes annually, varies with marital status, and that Texas offers multiple pathways towards eligibility.

 Simplified Eligibility Criteria: Single Applicant for Nursing Home Care
Texas seniors must be financially and medically eligible for long-term care Medicaid. They must have limited income, limited assets, and a medical need for care. In 2023, a single individual applying for Nursing Home Medicaid in TX must meet the following criteria: 1) Have income under $2,742 / month 2) Have assets under $2,000 3) Require the level of care provided in a nursing home facility.

The table below provides a quick reference to allow seniors to determine if they might be immediately eligible for long-term care from a Texas Medicaid program. Alternatively, one can take the Medicaid Eligibility Test. IMPORTANT: Not meeting all of the criteria does not mean one is ineligible or cannot become eligible for Medicaid. More.

2023 Texas Medicaid Long-Term Care Eligibility for Seniors
Type of Medicaid Single Married (both spouses applying) Married (one spouse applying)
Income Limit Asset Limit Level of Care Required Income Limit Asset Limit Level of Care Required Income Limit Asset Limit Level of Care Required
Institutional / Nursing Home Medicaid $2,742 / month* $2,000 Nursing Home $5,484 / month* $3,000 Nursing Home $2,742 / month for applicant* $2,000 for applicant & $148,620 for non-applicant Nursing Home
Medicaid Waivers / Home and Community Based Services $2,742 / month† $2,000 Nursing Home $5,484 / month† $3,000 Nursing Home $2,742 / month for applicant† $2,000 for applicant & $148,620 for non-applicant Nursing Home
Regular Medicaid / Medicaid for the Elderly and People with Disabilities $914 / month‡ $2,000 Help with ADLs $1,371 / month‡ $3,000 Help with ADLs $1,371 / month‡ $3,000 Help with ADLs
*All of a beneficiary’s monthly income, with the exception of a Personal Needs Allowance of $60, Medicare premiums, and possibly an income allowance for a non-applicant spouse, must go towards nursing home costs.

†Based on one’s living setting, a program beneficiary may not be able keep monthly income up to this level.

‡To be eligible for Regular Medicaid, a senior must receive SSI. Persons who are determined eligible for SSI are automatically eligible for TX Medicaid.

 

Income Definition & Exceptions

Countable vs. Non-Countable Income
Nearly any income that a Medicaid applicant receives is counted towards Medicaid’s income limit. Countable income includes employment wages, alimony payments, pension payments, Social Security Disability Income, Social Security Income, IRA withdrawals, and stock dividends. Veteran’s Aid & Attendance and Housebound pensions do not count towards the income limit. Other non-countable income includes Holocaust restitution payments.

Treatment of Income for a Couple
When only one spouse of a married couple applies for Institutional Medicaid or a Medicaid Waiver, only the income of the applicant is counted. This means the income of the non-applicant spouse is disregarded and does not impact the income eligibility of their applicant spouse. The non-applicant spouse, however, may be entitled to a Monthly Maintenance Needs Allowance (MMNA) from their applicant spouse to prevent spousal impoverishment. In 2023, the MMNA in TX is $3,715.50 / month. If a non-applicant spouse has monthly income under this amount, income can be transferred to them from their applicant spouse, bringing their income up to this level. A non-applicant spouse who already has an income of $3,715.50 / month or more is not entitled to a MMNA / spousal income allowance.

Income is counted differently when only one spouse applies for Regular Medicaid; the income of both the applicant and non-applicant spouse is calculated towards the applicant’s income eligibility. There is no Monthly Maintenance Needs Allowance for a non-applicant spouse. More on how Medicaid counts income.

 

Asset Definition & Exceptions

Countable vs. Non-Countable Assets
Countable assets count towards Medicaid’s asset limit and includes cash, stocks, bonds, investments, bank accounts (credit union, savings, and checking), any remaining funds from Covid-19 stimulus checks, and real estate in which one does not reside. There are also many assets that Medicaid considers to be exempt (non-countable). Exemptions include personal belongings, household furnishings, an automobile, irrevocable burial trusts, and IRAs / 401Ks in “payout” status. This means that the owner is withdrawing the Required Minimum Distribution (RMD). One’s primary home is also generally exempt.

Home Exemption Rules
For home exemption, the Medicaid applicant must live in the home or have Intent to Return, and in 2023, have a home equity interest no greater than $688,000. Equity interest is the value of the home, minus any outstanding debt, in which the Medicaid applicant owns. If the applicant has a spouse living in the home, it is exempt regardless of where the applicant lives and their home equity interest.

While the primary home is usually exempt from Medicaid’s asset limit, it is not exempt from Medicaid’s Estate Recovery Program. Following a long-term care Medicaid beneficiary’s death, Texas’ Medicaid agency attempts reimbursement of care costs through whatever estate of the deceased still remains. This is often the home. Without proper planning strategies in place, the home will be used to reimburse Medicaid for providing care rather than going to family as inheritance.

Treatment of Assets for a Couple
All assets of a married couple are considered jointly owned. This is true regardless of the long-term care Medicaid program for which one is applying and regardless of if one or both spouses are applicants. There is, however, a Community Spouse Resource Allowance (CSRA) that protects a larger amount of a couple’s countable assets for the non-applicant spouse of an Institutional Medicaid or Medicaid Waiver applicant. In 2023, the community spouse (the non-applicant spouse) can retain 50% of the couples’ assets, up to a maximum of $148,620. If the non-applicant’s half of the assets is under $29,724, 100% of the assets, up to $29,724 can be retained by that spouse.

Medicaid’s Look-Back Rule
Texas has a 5-year Medicaid Look-Back Period for Nursing Home Medicaid and Medicaid Waivers that immediately precedes one’s application date. During the “look back”, the state scrutinizes all asset transfers, including one’s made by a non-applicant spouse, to ensure no assets were gifted or sold under fair market value. If so, a Penalty Period of Medicaid ineligibility will be calculated. This is because it is assumed assets were transferred to meet Medicaid’s asset limit. Some persons mistakenly think that the IRS Gift Tax Exemption extends to Medicaid and unknowingly violate Medicaid’s Look-Back Period. Note that the Look-Back Rule does not apply to Regular Medicaid.

 

Medical / Functional Need Requirements

An applicant must have a medical need for Medicaid long-term care. For Nursing Home Medicaid and Medicaid Waivers, a Nursing Facility Level of Care (NFLOC) is required. Certain benefits may have additional eligibility requirements specific to the particular benefit. For example, in order for a Waiver to pay for home modifications, the inability to safely live at home without modifying the home might be necessary. For long-term care services via the Regular Medicaid program, a functional need with the Activities of Daily Living (ADLs) is required, but a NFLOC is not necessarily required.

 

Qualifying When Over the Limits

For Texas residents, aged 65 and over, who do not meet the financial eligibility requirements above, there are other ways to qualify for long-term care Medicaid.

1) Qualified Income Trusts (QIT’s) – Also called Miller Trusts, QITs are irrevocable trusts that allow Institutional Medicaid and Medicaid Waiver applicants who are over the income limit to still become income-eligible. Irrevocable means that the terms of the trust cannot be altered or canceled. Essentially, a Medicaid applicant’s “excess” income (over the Medicaid limit) is deposited into the QIT and is no longer counted towards Medicaid eligibility. A designated trustee manages the trust and can only use funds for designated purposes, such as paying unreimbursed medical expenses of the Medicaid enrollee.

2) Asset Spend Down – Persons who have assets over the Medicaid limit can still become asset-eligible by “spending down” excess assets on ones that are non-countable. Examples include making home modifications, like the addition of wheelchair ramps or stair lifts, prepaying funeral and burial expenses, and paying off debt. Remember that assets cannot be gifted or sold under fair market value, as it violates Medicaid’s Look-Back Rule. When “spending down”, it is best to keep documentation of how assets were spent as evidence this rule was not violated.

 Our Medicaid Spend Down Calculator can assist persons in determining if they might have a spend down, and if so, provide an estimate of the amount.

3) Medicaid Planning – The majority of persons considering Medicaid are “over-income” and / or “over-asset”, but they still cannot afford their cost of long-term care. For these individuals, Medicaid planning exists. By working with a Medicaid Planning Professional, families can employ a variety of strategies to help them become Medicaid eligible, as well as to protect their home from Medicaid’s Estate Recovery Program. Connect with a Medicaid Planner.

 

Specific Texas Medicaid Programs

In addition to paying for nursing home care, Texas Medicaid offers the following programs relevant to the elderly that helps them to remain living at home, in adult foster care homes, or in assisted living residences.

1) STAR+PLUS Waiver – Also called STAR+PLUS HCBS, this is a limited enrollment, managed care program that covers assisted living services, adult foster care services, and many in-home supports to help beneficiaries avoid nursing home placement.

2) Community First Choice (CFC) Program – An entitlement program that, in addition to personal care, provides in-home support, such as meal preparation, medical alert services, and light housework. This program allows for self-direction, meaning program participants can hire the caregiver of their choosing, including some relatives, to provide them with personal care assistance.

3) Primary Home Care (PHC) – This is another program that provides for personal care in the home. Like Community First Choice, program participants can choose their caregivers, which includes the ability to select family members.

4) Day Activity and Health Services (DAHS) – This is an adult day care program that helps families care for their loved ones outside of nursing homes. Daytime supervision and health services are provided at community facilities during normal working hours.

5) Texas Community Attendant Services (CAS) – Provides non-medical personal care assistance, homemaker services, and transportation assistance to / from medical appointments.

6) Program of All-Inclusive Care for the Elderly (PACE) – The benefits of Medicaid, including long-term care, and Medicare are combined into a single program. Additional benefits, such as dental and eye care, may be available.

 

How to Apply for Texas Medicaid

Texas seniors can apply online for Medicaid at Your Texas Benefits or submit a completed paper application, which can be found here. For assistance with the application process or to request a mailed application, call Texas Health and Human Services at 1-877-541-7905. One’s local Area Agency on Aging office might also be helpful in answering program questions and providing application assistance.

Prior to applying for Medicaid benefits in Texas, it is imperative that seniors be certain that all eligibility requirements for the program in which they are applying are met. Persons who have income and / or assets over the limit(s), or are unsure if they meet the financial eligibility criteria, should consider Medicaid planning. Familiarizing oneself with general information about the application process for long-term care Medicaid can be helpful.

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