TRICARE does not pay for long-term custodial nursing home care, and that single fact catches Bell County military families harder than anywhere else in Texas. A retired soldier who spent a career being covered, and whose family has never had to think about a medical bill, reaches the point of needing help with bathing, dressing and transfers, and discovers that neither TRICARE nor Medicare covers custodial care indefinitely. Medicare pays for limited skilled care after a qualifying stay. After that the payer is the family, or Texas Medicaid, or a VA benefit if one applies.
Texas Medicaid, delivered for long-term services through STAR+PLUS and the nursing facility program, applies a $2,000 countable-resource limit to a single applicant as of 2026. Verify it with the Texas Health and Human Services Commission. What follows walks a Bell County household’s balance sheet item by item, because the useful question is never what the rules are in general but where each specific thing lands: the homestead, the truck, a mineral interest inherited from a grandparent, an IRA, and the several kinds of life insurance a military family typically holds. The insurance section is split in two, because SGLI and VGLI behave nothing like a commercial whole life policy.
In This Article
- First, the Trust Texas Requires
- The Homestead
- Vehicles, and the Things Parked Behind the House
- Mineral and Royalty Interests
- Cash, Accounts and Retirement Assets
- Military Life Insurance: SGLI, VGLI, and What Cannot Be Sold
- Commercial Cash-Value Policies: Face Value First
- Two Look-Backs: 60 Months for Medicaid, 36 for VA Pension
- What a Month Costs in Killeen, Temple and Harker Heights
- Where It Is Filed, and When Selling Is the Wrong Answer
- Frequently Asked Questions
First, the Trust Texas Requires
Before the asset walk, deal with income, because in Texas it is a gate rather than a sliding scale. Texas caps income for nursing facility Medicaid at 300 percent of the federal benefit rate, roughly $2,900 to $3,100 as of 2026 subject to annual adjustment. If gross monthly income exceeds the cap, eligibility requires a Qualified Income Trust, commonly called a Miller trust: a dedicated bank account under a trust document, funded each month with income above the allowance and disbursed under program rules.
This is where military retirement bites. A retired senior noncommissioned officer’s military pension, plus Social Security, plus a VA benefit or a second civilian pension, very commonly clears the cap. Families assume income that modest cannot disqualify anyone. In Texas it can, until the trust exists and is funded, and the trust generally has to be funded in each month for which coverage is sought. Verify the current cap with HHSC and have a Texas elder law attorney draft the trust; local attorneys around Killeen and Temple handle these routinely.
Note also that VA compensation and pension are treated differently from each other and from military retired pay for various purposes. Do not assume all three flow into the trust the same way. Ask.
The Homestead
The primary residence is generally excluded while the applicant is in a facility with an intent to return, or while a spouse or certain dependent relatives live there, subject to a federal home equity limit that is indexed annually and sat in the low $700,000s for 2025. Confirm the 2026 figure. In Bell County that limit rarely binds: housing in Killeen, Harker Heights and Temple remains affordable by Texas metropolitan standards, and a typical home here is well under the cap.
Texas adds something most states do not. Texas homestead protections are unusually strong, and they matter on the back end rather than during eligibility. Texas operates its Medicaid Estate Recovery Program, known as MERP, which seeks repayment from the estates of deceased recipients, but Texas applies numerous exemptions and hardship waivers, and the interaction with Texas homestead law means recovery against a family home does not play out the way it does in many other states. That is not a promise, it is a reason to get specific advice: ask HHSC for the current MERP notice and exemptions, and ask a Texas elder law attorney what applies to your family’s property.
What does not work is transferring the house to a child to protect it. That is a transfer inside the look-back, and it creates a penalty period. Exclusion is not the same as gifting.
Vehicles, and the Things Parked Behind the House
One vehicle is generally excluded when used for the applicant or a household member. Personal effects and household goods are generally excluded as well.
Everything else with a title counts at equity value, and Bell County households have more titled property than average: a second truck, a travel trailer, a boat, a motorcycle, sometimes an ATV. A vehicle that has not moved in two years is still an asset. A truck titled to a parent but driven by a grandson is still the parent’s asset, and it is also the setup for a transfer problem if someone signs it over to fix the paperwork.
Two rules. Document value with something defensible rather than a guess. And if a vehicle is sold, keep the bill of sale and the deposit record so the transaction is verifiable as an arm’s length sale at fair market value; a truck sold to a relative for a thousand dollars is a partially uncompensated transfer for the difference.
Mineral and Royalty Interests
This is the Texas item that surprises out-of-state advisors and, frequently, the family itself. Inherited mineral rights, a fractional royalty interest, or a working interest in a producing lease is property. It is generally a countable resource at value, and any royalty payments are income. Many Central Texas families hold small fractional interests passed down through several generations without ever thinking of them as assets, and a monthly royalty check of a few hundred dollars is enough to interact with the income cap discussed above.
Three practical steps. Look for royalty statements and any 1099 forms in the last five years of records. Check the county clerk’s records in whatever counties the family has roots, not just Bell County, because these interests sit where the minerals are. And get a valuation approach agreed with the caseworker rather than asserting the interest is worthless: an unproducing interest may have modest value, but the assertion has to be supportable.
Do not deed a mineral interest to a child to simplify the application. It is a transfer, it is recorded, and it will be found.
Cash, Accounts and Retirement Assets
Checking, savings, certificates, and brokerage balances count at value against the $2,000 limit as of 2026. Joint accounts are generally treated as available to the applicant unless the family can establish whose deposits funded them, which matters in households where an adult child was added to an account years ago for convenience.
Retirement accounts are where state treatment diverges most, and Texas has its own approach depending on whether the account is producing periodic payments and whose account it is. A community spouse’s retirement assets are treated differently again. This is not a place for a general answer from a national website; ask HHSC and, better, a Texas elder law attorney, because getting it wrong is frequently a five-figure error.
Also account for the Thrift Savings Plan and any civilian federal retirement assets, which are common in a county with a large federal-civilian and contractor workforce alongside the uniformed population. And be careful with annuities: some annuity structures are treated as excluded income streams and others as countable resources, and the drafting determines the answer.
| Asset | Generally countable? | What decides it |
|---|---|---|
| Homestead | No, with intent to return or a spouse in residence | Federal home equity limit; rarely binding in Bell County |
| One vehicle | No | Used by the applicant or a household member |
| Second truck, trailer, boat, ATV | Yes, at equity value | Titled property; document value, do not gift it |
| Mineral or royalty interest | Yes | Value of the interest; royalties count as income |
| SGLI | No | Term, no cash value; ends about 120 days after separation |
| VGLI | No | Term, no cash value, cannot be sold; premiums rise by age band |
| Whole or universal life | Yes if aggregate face exceeds the burial threshold | Cash surrender value net of loans |
| Retirement accounts and annuities | Depends | Payout status, ownership, and annuity drafting |
Military Life Insurance: SGLI, VGLI, and What Cannot Be Sold
Bell County files contain more government life insurance than files anywhere else in Texas, and the rules are specific.
SGLI covers service members during service and generally ends 120 days after separation. It is term coverage with no cash value, so it is generally not a countable resource, and it cannot be sold to a third party because there is no assignable cash-value contract to sell.
VGLI is the veterans’ continuation of SGLI. The application window is generally within one year and 120 days of separation, and applying within roughly the first 240 days avoids health questions. VGLI is term insurance whose premiums increase with the veteran’s age band, and this is the honest part families need to hear: VGLI has no cash surrender value, cannot be sold, and becomes expensive in the later age bands, which is exactly when a household facing care costs is least able to pay it. There is nothing to convert into care dollars. Its value is the death benefit, and only if the premium keeps getting paid.
The practical implication is uncomfortable but clear: if the household’s only life insurance is VGLI, then the insurance is not a source of funds for care. Plan around that rather than hoping otherwise. Our note on what can and cannot be done with term coverage explains why cash value, not the death benefit, determines whether a policy has a market.
Separately, ask the VA about needs-based pension with aid and attendance, which is a genuine funding avenue for some wartime veterans and surviving spouses and is entirely distinct from Medicaid. It has its own net worth limit and its own look-back, covered below.
Commercial Cash-Value Policies: Face Value First
If the household also holds a commercial whole life or universal life policy, two separate tests apply and they use different numbers.
Face value decides exclusion. Texas excludes life insurance as a burial resource only if the total face amount of all policies on the same insured stays at or under the state threshold, a figure derived from federal SSI rules that most states set at $1,500. Confirm the current Texas figure with HHSC. The test aggregates: two $1,000 policies do not each get excluded, their combined face amount is measured, and exceeding the threshold destroys the exclusion for all of them.
Cash surrender value is what counts if the exclusion is lost. A $50,000 whole life policy with $8,700 of cash value and a $1,500 loan is a $7,200 countable resource, not a $50,000 one. Get an in-force statement from the carrier showing owner, insured, current face amount, current cash surrender value, outstanding loans and the paid-to date. Two to four weeks is normal.
If that cash value puts the household over the limit, there are four exits: absorb it in documented allowable spending, surrender the policy, elect reduced paid-up coverage so a smaller face amount may fall inside the burial exclusion, or sell it in a life settlement, which can exceed surrender value for an older insured with health impairments and takes roughly two to four months. Our explainer on how Medicaid treats life insurance sets out which figure controls which test.
Two Look-Backs: 60 Months for Medicaid, 36 for VA Pension
This is the Bell County planning trap. There are two separate transfer rules and they do not match.
Texas Medicaid reviews the 60 months before the application date for transfers made for less than fair market value, and a disqualifying transfer creates a penalty period during which Medicaid will not pay for long-term care, computed by dividing the transferred value by a statewide average private-pay figure. Because Texas private-pay nursing rates are among the lowest in the country, the divisor is low, which means a given gift buys a longer penalty here than the same gift would in a high-cost state. That is counterintuitive and it matters.
VA needs-based pension with aid and attendance has its own net worth limit and its own look-back of 36 months for asset transfers, with penalties calculated under VA’s own rules. So a transfer can be fine for one program and penalized under the other, and a strategy designed to qualify for VA pension can create a Medicaid penalty two years later.
Do not plan for one program in isolation. If a veteran or surviving spouse may use both, the sequencing needs an attorney or an accredited VA representative who understands both frameworks. And note that a life insurance sale documented at arm’s length for fair market value is not a penalized transfer under either program, while a discounted sale to a relative is.
What a Month Costs in Killeen, Temple and Harker Heights
Texas is one of the least expensive long-term care markets in the country, and Bell County reflects it. As of 2026, semi-private skilled nursing in the Killeen and Temple area generally runs about $5,200 to $6,500 a month with private rooms roughly $6,500 to $8,000, and assisted living about $4,000 to $5,000, based on Genworth-style cost-of-care survey data for Texas trended forward. Those are ranges; get written private-pay rates from each facility.
Two consequences follow, one good and one bad. The good news is that a given amount of savings stretches much further here than in New Jersey or Oregon: $60,000 of liquid assets is roughly ten months at $5,900 a month, where the same money would be five months in a high-cost market. The bad news, already noted, is that the low statewide divisor makes transfer penalties longer in months for the same dollar gift.
The local fact that shapes the whole picture is the concentration of military and veteran households around Fort Cavazos, one of the largest installations in the country. That produces an unusual asset mix: government term insurance with no cash value, TRICARE that does not cover custodial care, military retired pay that pushes households over the income cap, and a real possibility of VA needs-based benefits alongside Medicaid. Our Bell County cost breakdown runs the runway arithmetic with local figures.
Where It Is Filed, and When Selling Is the Wrong Answer
Texas Medicaid eligibility is determined by the Texas Health and Human Services Commission. Applications can be filed online through the state’s benefits portal, by mail, or at an HHSC benefits office, and Bell County residents are served by offices in the Killeen and Temple area; confirm current locations and hours. Long-term services and supports for most adults are delivered through STAR+PLUS, which requires enrollment in a managed care plan, and a level-of-care determination is a separate step from the financial review. Nursing facility business offices file these packets constantly and can submit on the family’s behalf.
Two other doors. The Area Agency on Aging of Central Texas, operating out of Belton under the region’s council of governments, is the local resource for care options, caregiver support and benefits counseling, including the state’s health information and counseling program for Medicare questions. For anything about a life insurance carrier or contract, the regulator is the Texas Department of Insurance.
Finally, four situations make selling a policy the wrong move. A small face amount in the $5,000 to $10,000 range will not draw a competitive offer. A policy already inside the burial exclusion is not counting, so selling it converts an excluded asset into countable cash and creates a problem out of nothing. A healthy insured draws weak offers because pricing tracks life expectancy. And a surviving spouse who needs the coverage changes everything, particularly in a military household where a survivor may be counting on a death benefit alongside Survivor Benefit Plan income. Model both households with an elder law attorney first.
Pine Lake Life Solutions does not purchase policies and is not licensed in every state. We read the contract, tell you what it is worth held and what the market would pay, and put it in writing for the caseworker and your attorney. If you want that number before a decision gets made under pressure, ask for a free policy review.
Frequently Asked Questions
Does TRICARE cover nursing home care?
Not long-term custodial care. TRICARE and Medicare cover limited skilled care under specific conditions, typically after a qualifying hospital stay and for a limited period. Ongoing help with bathing, dressing, transfers and supervision is custodial care, and the payers are the family, Texas Medicaid, or in some cases a VA needs-based benefit. Plan on that rather than assuming military coverage carries through.
Can VGLI be sold to help pay for care?
No. VGLI is term insurance with no cash surrender value, and there is no assignable cash-value contract for a third party to buy. Its premiums also increase with the veteran’s age band, which makes it hardest to afford at exactly the moment care costs arrive. If VGLI is the household’s only life insurance, treat the insurance as unavailable for funding care and plan accordingly.
Does Texas require a Miller trust?
Yes if gross monthly income exceeds the cap, generally 300 percent of the federal benefit rate, roughly $2,900 to $3,100 as of 2026 subject to adjustment. Military retired pay plus Social Security often clears it. A Qualified Income Trust must be established and generally funded in each month you want covered. Verify the current cap with HHSC and have a Texas attorney draft the trust.
Do inherited mineral rights count as an asset?
Generally yes, as a countable resource at value, and any royalty payments count as income. Small fractional interests passed down through generations are common in Central Texas families and are often forgotten entirely. Look for royalty statements and 1099 forms in five years of records, check county clerk records where the minerals sit, and agree a valuation approach with the caseworker.
Why would a gift cost more penalty months in Texas than in another state?
Because the penalty divides the transferred value by a statewide average private-pay nursing facility cost, and Texas rates are among the lowest in the country. A low divisor produces more penalty months for the same dollar gift. So the same $40,000 transfer that buys four penalty months in a high-cost state can buy considerably more here. Confirm the current divisor with HHSC.
How do the Medicaid and VA look-backs differ?
Texas Medicaid reviews 60 months of transfers. VA needs-based pension with aid and attendance uses its own net worth limit and a 36-month look-back with penalties under VA rules. A transfer can be acceptable for one program and penalized by the other, and a VA-focused strategy can create a Medicaid penalty later. If both programs are in play, get advice covering both before moving anything.
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Pine Lake Life Solutions does not purchase life insurance policies and does not provide legal, tax, or investment advice. Information provided is for educational purposes only. Eligibility for any option, including life settlements, is not guaranteed and depends on individual circumstances, policy terms, underwriting, and market conditions. Consult independent legal, tax, or financial professionals before making decisions regarding a life insurance policy.