When Medicaid in Texas Will Pay for a Nursing Home, Assisted Living, or Home Health Care

In Texas, long-term care is expensive, whether in a nursing home, assisted living facility, or home health care. Medicare coverage for long-term care is very limited, private health insurance policies generally don't cover long-term care, and few people have purchased private long-term care insurance policies. For Texans needing long-term care, Medicaid is the most common source of funding.

Medicaid (along with its related Children's Health Insurance Plan, or CHIP) is funded by both federal and state resources, and it provides health coverage to around five million Texans.

There are many different ways to become eligible for Medicaid in Texas, and Texas has specific eligibility rules for long-term care services like nursing homes, assisted living facilities, and home health care services.

Medicaid for Texans in Nursing Homes

In 2021, the average monthly cost of a private room in a nursing home in Texas was approximately $7,100, or over $85,000 per year. Thus, most people can't afford to pay their own nursing home expenses. Nursing homes are residential facilities that offer 24-hour skilled nursing care in addition to other supportive services.

If you already qualify for Texas Medicaid, then your Medicaid coverage includes nursing home care if you need it. Groups of people who can automatically qualify for Medicaid include SSI recipients, participants in the TANF (Texas' Temporary Assistance to Needy Families) program, and children in its foster care system.

In addition, people who are 65 or older, disabled, or blind can qualify for Medicaid if they also meet income and resource limits.

Income Limits for Long-Term Care Through Texas Medicaid

To be able to get Texas's Medicaid program to pay for long-term care in 2024, a single person's monthly income cannot be higher than $2,829. If both spouses of a married couple need nursing home care, the couple's monthly income can't be higher than $5,658. The applicable income and resource limits, discussed below, may change each year.

Some people who have excess income, which would otherwise keep them from qualifying for Medicaid, can still qualify by "spending down" their income on qualifying medical expenses until they reach Medicaid income limits. Professional advice from a financial advisor or lawyer can help guide you in spending down your income or assets, or using other ways to reduce the income or assets that count against Medicaid caps.

For instance, Texas allows you to place some extra monthly income into a trust to allow you to qualify financially for Medicaid. These trusts are called "Medicaid Trusts," "Miller Trusts," or "Qualified Income Trusts" (QITs); you can read more about them in Nolo's article on Medicaid income trusts.

If you meet the non-financial criteria for Medicaid but have been told that you're over-income for the program, you should consult a professional to see whether a trust can help you qualify.

Resource Limits for Texas Medicaid

To qualify for Medicaid, you must have few resources. Resources are assets, like money in the bank, retirement accounts, land, and personal property like cars.

The resource limit for a single person to qualify for Texas Medicaid is $2,000, and for a married couple who both want to qualify for Medicaid, it is $3,000.

Some property does not count toward the resource limit. In Texas, the home you live in (or intend to return to, if you are in a nursing home) is excluded from the resource calculation as long as it is worth less than $713,000 (in 2024). Medicaid excludes some other resources as well, including personal belongings and one car.

Medicaid Managed Care in Texas

Most Medicaid recipients in Texas receive medical services through a managed care system. The most common system is called the State of Texas Access Reform (STAR) Managed Care. In managed care, Medicaid recipients pick a medical plan from a list of plans available in their area and choose a primary physician who works under that plan. The plans are operated by private companies that contract with Texas to provide Medicaid services.

STAR+PLUS is Texas' Medicaid managed care program for adults who have disabilities or who are 65 and over. Through STAR+PLUS, enrolled individuals receive Medicaid healthcare and long-term care support and services through their chosen managed care plan. Previously limited to elderly and disabled individuals who didn't need nursing home care, since 2014, STAR+PLUS plans cover nursing home and in-home care.

If you have a problem getting your managed care plan to pay for services that you need, you can appeal the written denial notice you receive. In addition, you can follow the separate complaint procedure for your plan.

If you still have a problem with your Medicaid managed care program, you can file a complaint with Texas' Health and Human Services Commission Ombudsman, reachable at 877-787-8999 or 866-566-8989. Find out more about the Ombudsman here.

When a Nursing Home Is Medically Necessary

Medicaid will pay for a nursing home only when it is "medically necessary." In Texas, for a nursing home to be considered medically necessary, you must have a medical condition that is so serious that you need the level of nursing care available only in an institution.

Your doctor must document your medical condition and must prescribe skilled nursing services to be provided on a regular basis in an institutional setting. Nursing care includes things like giving shots, inserting a feeding tube or catheter, treating bed sores, and changing wound dressings.

For Medicaid to keep paying for your nursing home stay, a doctor has to certify at least every six months that you meet the standard for medical necessity.

If you need only custodial care (someone to watch over you), for instance, because you fall often or because you have dementia and tend to wander, then Medicaid may find that a nursing home stay is not medically necessary because you do not need a skilled nurse.

Medicaid for Texans in Assisted Living Facilities

Assisted living facilities (ALFs) provide food, personal care services like help with bathing or dressing, and medication administration. Historically, Medicaid didn't pay for ALFs. However, Texas has programs offering Medicaid payment for assisted living facilities, if you meet specific criteria.

If you're otherwise eligible for Medicaid and you can show that a nursing home is medically necessary for you (also called "meeting the nursing home level of care"), then you could qualify for STAR+PLUS Waiver services. This program pays for home- and community-based services, including assisted living facilities, for people who would otherwise have to be institutionalized in a nursing home.

The STAR+PLUS Waiver program has limited enrollment and there may be a waiting list for certain services. For more information, visit the STAR+PLUS web page of Texas Health and Human Services.

Texas also offers continuing care retirement communities (CCRCs), which combine independent living, assisted living, and nursing home care in one residential setting. CCRCs, which are regulated by the Texas Department of Insurance (TDI), typically charge entrance and monthly fees.

Once in a CCRC, you can use long-term care insurance, private insurance, Medicare, or Medicaid to pay for some of your health care, depending on your coverage options and the types of services you require. If you have questions, call the TDI at 800-252-3439 or visit their CCRC web page.

Medicaid for Texans Needing Home Health Care

Texas covers home health services under its Medicaid program. If your doctor prescribes home health services like nursing or therapy services in your plan of care for a particular medical condition, Medicaid will cover them. Medicaid reviews your need for home health care every 60 days.

You don't need to meet the nursing home level of care to qualify for home health services. However, because these Medicaid-funded home health services need to be related to a doctor's plan of care for a particular medical condition, they're generally offered on a short-term basis.

If you otherwise qualify for Medicaid and your doctor says that you have a medical condition that causes you to need assistance with one or more activities of daily living (ADLS), you might qualify for Primary Home Care (PHC), a Texas program providing long-term care services at home.

In PHC, an attendant provides medically related personal care service (PCS) to people who need assistance with ADLs. Activities of daily living are tasks like bathing, getting dressed, doing routine hair and skin care, preparing meals and eating, getting exercise, using the toilet, walking, and getting in or out of a bed, chair, or wheelchair. For more information and to apply, visit the Texas Health and Human Services PHC program web page.

Other associated Texas Medicaid home health and PCS programs include:

• Community First Choice (CFC)
• Day Activity and Health Services (DAHS)
• Community Attendant Services (CAS)
• Program of All-Inclusive Care for the Elderly (PACE), and
• the Money-Follows-the-Person (MFP) demonstration project.

For general information about PCS Medicaid benefits, visit the Texas Health and Human Services PCS web page.

_{Updated December 13, 2023}