Here is how it usually goes. Medicare denies the claim. Someone says the word Medicaid. And a family that is already frightened, already guilty about something, already running on four hours of sleep, is handed a set of rules with numbers in them and told to get it right the first time. If you are reading this at eleven at night with a letter in your other hand, you are not behind and you are not failing. You have been dropped into something genuinely hard.

And I am going to say the part people tend to leave out: it is hard on purpose. These rules are public, and they are built in a way that takes real work to understand, and that difficulty is not free. It is paid for by the families who never get to the bottom of it. The ones who spend down money that was protected from the very start. The ones who read the wrong figure off a bank statement and conclude the door is shut. The ones who sign a house over to a child because someone at church said that was what you do. Nobody sends those families an invoice for the mistake. They simply end up with less, and most of them never learn how much less.

You deserve better than that, so this page does not spend its time reassuring you. Long-term care Medicaid is a federal program that every state administers with its own figures and its own paperwork, so the structure below is national and Texas is the worked example: three gates, applied in a fixed order, with each published figure linked to the agency that publishes it and the places families get caught marked as we go. Jessica works with families nationwide through virtual coaching, with in-person roots in Austin and Central Texas, so if you are reading this from Ohio or Oregon, the shape of the answer is the same and it is the numbers that move.

This page describes how the rules work. It will not tell you what to do with your parent’s money, because that depends on facts this page cannot see, and because deciding what a particular family should do with a particular asset is legal work rather than reading. What it can do is make sure that when you sit down with somebody qualified to advise you, you walk in as the best-informed person at that table.

Estimated reading time: 17 min read

Overview

Long-term care Medicaid turns on three gates in every state: a monthly income test, a countable asset test, and a medical level-of-care determination. Texas is the worked example here. For a single applicant in 2026 the gross monthly income limit is potentially around $2,982 and countable assets are capped at roughly $2,000, though a primary home, one vehicle and several other categories are typically exempt. Income above the limit does not automatically disqualify anyone: a Qualified Income Trust, often called a Miller trust, exists precisely for that situation. Married couples are assessed differently again, with substantial protections for the spouse who stays home, and those spousal figures are federal rather than Texan, so they apply wherever you live. Every figure below is linked to the agency that publishes it, they all reset annually, and each one should be checked at the source before anybody relies on it or moves a dollar.

What this guide covers

• The three gates, in the order Texas applies them
• The income gate, and the one word that costs families the most
• The asset gate: the number that frightens people, and the list that does not get read out
• If your parent is married, the protections are larger than anyone tells you
• Over the income limit: what a Qualified Income Trust actually does
• Nursing Home Medicaid and STAR+PLUS are not the same door
• The five-year lookback is arithmetic, and arithmetic can be planned around
• What the families who come through this well tend to have in hand
• Protect Your Family’s Financial Future

The three gates, in the order Texas applies them

Almost every confusing conversation about Medicaid begins by treating this as one enormous test that a family either passes or fails. It is three separate tests, applied in sequence, and they are not interchangeable. A family can clear one and still be stopped at another for reasons that have nothing to do with the first. If it has felt incoherent so far, that is because you were handed it as one lump.

The first gate is income: what your parent receives each month, measured gross, before anything is taken out. The second is assets, where the words countable and exempt do almost all of the work and where most of the fear lives. The third is medical, a determination that your parent genuinely requires the level of care being applied for. The money and the medical are decided separately, so passing the financial tests and still being told the care determination has not been met is a different problem with a different fix, not a sign that you did the first part wrong.

The order matters more than it sounds. What happens at gate two frequently depends on what happened at gate one, and a move made in a panic to clear one gate can create a penalty at another. This is the expensive part of not knowing the sequence, and it is worth being blunt about: families are rarely damaged by these rules. They are damaged by having to act before anybody has explained them.

• Gate 1, income: gross monthly income, before any deductions.
• Gate 2, assets: countable resources only, after exemptions are applied.
• Gate 3, level of care: a medical determination, assessed separately from the money.

The income gate, and the one word that costs families the most

For 2026, the gross monthly income limit for an individual applying for Texas Nursing Home Medicaid or a STAR+PLUS waiver is potentially around $2,982 a month. That number is not arbitrary, and knowing where it comes from means you never have to take anybody’s word for it again. Texas HHSC sets the special income limit at 300 percent of the full SSI federal benefit rate (HHSC MEPD Handbook G-6200), and the Social Security Administration publishes that rate at $994 a month for 2026 (SSA, SSI Federal Payment Amounts). Three times $994 is $2,982. Both figures reset every January, so check them at those two pages rather than trusting any article, this one included.

The word doing the damage is gross, and I want to slow down here because this one is quietly costing families a great deal. You look at what actually lands in the account each month, after the Medicare Part B premium has already come out, and you reasonably conclude your parent is comfortably under the limit. Texas does not assess that number. It assesses the figure before those deductions, which is routinely well over a hundred dollars higher. That gap is the whole difference between qualifying and not, it is almost never near the top of anything a family gets handed early on, and a household that checks the wrong line can walk away believing a door is closed that was never closed. If that is you, nothing about it was careless. It was the obvious thing to check.

And if your parent genuinely is over the limit, being over the limit is still not the end of the conversation. Texas is what is known as an income-cap state, and it built a specific mechanism for exactly this situation. It is further down this page, and the families who never hear about it tend to be the ones who needed it most.

The asset gate: the number that frightens people, and the list that does not get read out

The countable asset limit for a single applicant is potentially around $2,000 (HHSC MEPD Handbook F-1300, Resource Limits). That is the figure everybody repeats, it is the one that makes people feel their parent’s entire life is about to be liquidated, and on its own it tells you almost nothing. The exemption list is what decides the answer, and the exemption list is the part that seldom gets read out in the same breath.

A primary residence is generally exempt up to a home equity limit of potentially $752,000 for 2026, where the applicant or a qualifying relative lives there or the applicant intends to return. That figure is the federal floor: CMS requires every state to set its home equity limit somewhere between $752,000 and $1,130,000, and Texas applies the minimum (CMS, 2026 SSI and Spousal Impoverishment Standards). One vehicle is typically exempt regardless of value. Personal belongings, household goods and certain burial arrangements are usually excluded as well. Read that again if you need to: the house and the car, the two things families lie awake certain they are about to lose, are frequently the two things nobody is asking for.

What is counted tends to be liquid. Checking and savings balances, certificates of deposit, stocks and bonds, and second properties that are not the primary residence. So the exercise is not adding up everything your parent owns and despairing at the total. It is sorting that list into two columns and then looking only at one of them. Please do this before you do anything else, because a family that skips it and starts spending is very often spending money that nobody was ever going to take.

If your parent is married, the protections are larger than anyone tells you

When one spouse needs care and the other stays at home, Texas applies a separate set of protections built specifically to stop the at-home spouse being left with nothing. They carry bureaucratic names and they have entirely concrete consequences for whether your mother can keep paying her own bills.

The Community Spouse Resource Allowance protects a share of the couple’s countable assets for the spouse remaining at home. In 2026 that runs to potentially $162,660 at the maximum, with a minimum floor of around $32,532. The Monthly Maintenance Needs Allowance does the same job for income, permitting up to roughly $4,066.50 a month to be directed to the at-home spouse where their own income falls short. All three of those figures are federal, published each year by CMS rather than by Texas, which means they hold wherever in the country you are reading this (CMS, 2026 SSI and Spousal Impoverishment Standards).

Sit with those numbers, because they are the reason this section exists. Couples routinely start spending down on the belief that everything has to go, when a substantial portion was protected from the first day. That money does not come back. There is no form for it, no appeal, and nobody along the way whose job it was to stop them. It is one of the most painful things to watch, it is entirely preventable, and knowing this allowance before you begin is worth more than anything else on this page.

Over the income limit: what a Qualified Income Trust actually does

Texas is an income-cap state, which means income above the limit is a genuine bar rather than something that gets averaged away. It also means Texas built a door through its own cap: the Qualified Income Trust, widely called a Miller trust, and the state publishes its own material on it (HHSC MEPD Handbook Appendix XXXVI). Roughly half the states are income-cap states and most of them provide the same instrument under the same federal authority, so this is not a Texas curiosity.

Mechanically it is unglamorous. Income above the threshold is directed into a dedicated trust account each month instead of your parent’s ordinary account, and properly established and properly operated, that redirected income is not counted against the eligibility limit. The money does not disappear. And because families ask me this with real shame in their voices: this is not a loophole and you are not getting away with anything. The state wrote the cap and the state wrote the remedy for the cap. Using it is using the system exactly as it was built.

Two details do most of the damage when families take this on alone. The trust has to be funded correctly every single month, and a missed month can break eligibility for that month. And the trust document itself carries requirements that are legal in nature, which is why this is the point where families are usually better off with an attorney than a template.

Nursing Home Medicaid and STAR+PLUS are not the same door

These two get talked about as though they are the same thing, and the difference has a consequence you deserve on day one rather than in month nine.

Nursing Home Medicaid is an entitlement. If your parent meets the financial and medical criteria, coverage follows. STAR+PLUS Home and Community Based Services waivers, which fund care in the home instead of a facility, work differently. They operate with interest lists, and those lists can run for years.

So a family whose entire priority is keeping a parent at home can satisfy every published figure, do everything right, and still wait a very long time for that particular program, while the facility-based route is available now. Being well prepared does not move you up the list, and I would rather tell you that than let you find out later. It is not a reason to give up on home care. It is a reason to find out where you stand early, while the answer can still shape what you plan.

The five-year lookback is arithmetic, and arithmetic can be planned around

The lookback is the most feared item on this list and the most misunderstood, and if it has been sitting in your chest for weeks, this section is for you. Texas reviews asset transfers made in the five years before an application. Gifts, a property signed over to a child, money moved to help a grandchild with a deposit: all of it is examined.

What families believe is that a transfer inside that window disqualifies their parent permanently and that they have already ruined it. What actually happens is a division sum. The uncompensated value transferred is divided by a published daily penalty divisor, and the result is a period of ineligibility measured in days. Texas has used a divisor of potentially $262.37 a day for cases disposed on or after September 1, 2025 (HHSC MEPD Handbook I-5000, Calculation of Penalty Period). HHSC changes that number periodically so it tracks the average daily cost of nursing facility care in Texas, and other states publish their own, so the current figure is worth reading at the source before anybody does the arithmetic.

Hold on to that difference, because dread and arithmetic are not the same thing. A penalty period is a number you can look at, plan around and sometimes reduce. A closed door is not. It is also the strongest argument there is for learning these rules before money moves rather than afterwards, because nearly every transfer that causes trouble was made by somebody being kind to their family and having no idea it would ever count against them.

What the families who come through this well tend to have in hand

Nothing on this page tells you what to do with your parent’s money, and that is deliberate rather than coy. Deciding which assets a particular family should move, and when, is legal work, and a page cannot see your facts. What a page can describe is what the families who come through this without the expensive mistakes above tend to have assembled before anybody decides anything.

They have the gross income figure rather than the deposited figure. They have the assets sorted into countable and exempt before anything has been totalled or spent. They know whether the real goal is facility care or care at home, because the two programs behave nothing alike and the waiting behaves nothing alike either. And they have a written list of every transfer from the last five years, including the ones that felt like ordinary family kindness at the time, because those are the ones nobody thinks to mention until an eligibility worker asks.

That material is what turns a frightening appointment into a real conversation with somebody qualified to advise on the actual situation. Families who arrive holding it get further, faster, and are taken more seriously than families who arrive with a question and a shoebox. None of this can be made simpler than it is. What can change, starting tonight, is whether you are the least informed person in the room. And you do not have to work it out on your own.

Frequently asked questions

Q: What is the income limit for Texas Medicaid nursing home care?

A: For 2026 the gross monthly income limit for an individual is potentially around $2,982. It is a calculated figure rather than a chosen one: Texas HHSC sets the special income limit at 300 percent of the full SSI federal benefit rate, and the Social Security Administration publishes that rate at $994 a month for 2026. The detail that catches families is the word gross. Texas assesses income before deductions such as the Medicare Part B premium, so the amount that lands in the bank account is not the amount being tested, and it is usually more than a hundred dollars lower. Both figures reset each January and are worth confirming at HHSC and SSA directly.

Q: Does my parent’s house count as an asset?

A: Generally the primary residence is exempt up to a home equity limit of potentially $752,000 for 2026, where the applicant lives there or intends to return, or where a qualifying relative resides there. That $752,000 is the federal floor published by CMS, and Texas applies the minimum rather than electing a higher one. The house is the thing most families assume they are about to lose and it is frequently not counted at all. What can happen to the home later through estate recovery is a separate subject with separate rules, and it is worth asking an attorney about directly rather than guessing.

Q: What happens if my parent’s income is over the limit?

A: Texas is an income-cap state and provides the Qualified Income Trust, often called a Miller trust, for exactly this situation. Income above the threshold is directed into a dedicated trust account each month rather than counted against the limit. This is the state’s own remedy for the state’s own cap, so it is not a loophole, but it has to be established correctly and funded every single month, and the document carries legal requirements. It is a common point for families to involve an attorney.

Q: We gave money to a grandchild two years ago. Have we ruined my parent’s chances?

A: This is the fear that stops families asking, so it is worth describing precisely what the rule does. A transfer inside the five-year lookback is not treated as a permanent bar. Texas divides the uncompensated amount by a published daily penalty divisor, potentially $262.37 a day for cases disposed on or after September 1, 2025, and the result is a period of ineligibility counted in days. Whether a particular gift is treated as uncompensated at all, and what any resulting period would be, turns on facts a page cannot see and belongs with an attorney who can. The point that survives every variation is that this is arithmetic rather than a closed door, which is why the transfer history is worth assembling before an application instead of after.

Q: Can we get care at home instead of a nursing facility?

A: Possibly, though the two routes behave very differently and the difference is worth knowing early. Nursing Home Medicaid is an entitlement once the criteria are met. STAR+PLUS Home and Community Based Services waivers fund care at home but operate with interest lists that can run for years, and meeting every financial requirement does not move a family up that list. Families who want home care benefit from finding out where they stand while the timeline can still shape the plan.

Citations

• Texas HHSC, MEPD Handbook G-6200: Special Income Limit for the Eligibility Budget. The rule behind the $2,982 figure: Texas sets the special income limit at 300 percent of the full SSI federal benefit rate. https://www.hhs.texas.gov/handbooks/medicaid-elderly-people-disabilities-handbook/g-6200-special-income-limit-eligibility-budget
• Social Security Administration: SSI Federal Payment Amounts for 2026. The published federal benefit rate of $994 a month for an individual, which is the number the Texas income limit is calculated from. https://www.ssa.gov/oact/cola/SSI.html
• Texas HHSC, MEPD Handbook F-1300: Resource Limits. The countable resource limit of $2,000 for an individual, published by the agency that applies it. https://fhb.hhs.texas.gov/handbooks/medicaid-elderly-people-disabilities-handbook/f-1300-resource-limits
• CMS: 2026 SSI and Spousal Impoverishment Standards (Informational Bulletin, December 9, 2025). The federal source for the Community Spouse Resource Allowance minimum and maximum, the maximum Monthly Maintenance Needs Allowance, and the home equity limit range. https://www.medicaid.gov/federal-policy-guidance/downloads/cib12092025.pdf
• Texas HHSC, MEPD Handbook I-5000: Calculation of Penalty Period. How a transfer penalty is calculated, including the daily penalty divisor used for cases disposed on or after September 1, 2025. https://www.hhs.texas.gov/handbooks/medicaid-elderly-people-disabilities-handbook/i-5000-calculation-penalty-period
• Texas HHSC, MEPD Handbook Appendix XXXVI: Qualified Income Trusts and MEPD Information. The state’s own material on Qualified Income Trusts, the mechanism Texas provides for applicants over the income cap. https://www.hhs.texas.gov/handbooks/medicaid-elderly-people-disabilities-handbook/appendix-xxxvi-qits-mepd-information
• Medicare.gov: Long-term care. What Medicare does and does not cover, which is the gap most families discover first. https://www.medicare.gov/coverage/long-term-care

Related reading

• How do I qualify for Medicaid nursing-home care in Texas?
• What is a Medicaid spend-down, and how does it work in Texas?
• What is the Medicaid look-back period and how does it work?
• Do I need an elder law attorney, and what will it cost?
• How families pay for long-term dementia care
• How reactive caregiving costs families $750K, and what proactive planning saves
• Financial Wellness for Family Caregivers
• The Proactive Caregiver Method

About this article. Jessica Cannon is a CPA and a Certified Dementia Practitioner. She provides financial coaching, not legal or medical services. This article is general information about how these systems work, not advice about your situation, and it is not a substitute for the advice of an attorney. It is not medical advice, and it is not individualized tax or financial advice. For the legal instruments themselves, including wills, powers of attorney and guardianship, you will need a licensed attorney in your own state. Medicaid and long-term care rules also differ by state and change over time, so any Texas detail here is an example rather than a rule that will apply to you.