The Texas homestead exemption does not protect a house from Medicaid, and believing otherwise is the most common planning error in Conroe, Texas. Texas law famously shields an unlimited-value homestead from most creditors. Medicaid is not most creditors: eligibility applies a federal home equity limit, and Texas estate recovery operates under its own rules. A Montgomery County family that skipped planning because “the homestead is protected in Texas” has usually protected nothing they thought they had.
Conroe is the county seat of Montgomery County, Texas, north of Houston on Lake Conroe. Texas administers Medicaid eligibility at the state level, so there is no Montgomery County Medicaid office – the application goes to Texas Health and Human Services (HHSC) through YourTexasBenefits.com, by phone, or at an HHSC benefits office serving the county. Confirm the current office location and hours with HHSC or 2-1-1 Texas before driving anywhere.
The programs are Texas Medicaid: the Medicaid nursing facility program for institutional care and STAR+PLUS for managed long-term services and supports, including the STAR+PLUS home and community based services waiver. As of 2026 the countable-resource limit for a single long-term care applicant is $2,000. Confirm that figure and every other one here with HHSC. What follows is what actually causes Conroe applications to fail.
In This Article
- Denial 1: the Medical Necessity and Level of Care determination
- Denial 2: the mineral interest nobody thought was an asset
- Denial 3: a Miller Trust that exists but does not work
- Denial 4: the homestead misunderstanding, and the rest of the property
- Denial 5: the verification packet, and the STAR+PLUS interest list
- Denial 6: the life insurance policy
- What care costs in Conroe, and who to call
- Frequently Asked Questions
Denial 1: the Medical Necessity and Level of Care determination
Texas runs a clinical gate that is entirely separate from the financial one, and Montgomery County families routinely clear the money test and fail here.
Before Texas Medicaid pays for nursing facility care or STAR+PLUS waiver services, the applicant must be found to meet medical necessity and the required level of care. The assessment scores functional status, cognitive status, behavioral needs and skilled nursing requirements against defined criteria. It is completed with information from the facility or the treating providers, and it can come back negative on a person the family knows perfectly well cannot live alone.
Why it fails is almost never that the applicant is healthy. It is that the record understated the need. A parent with dementia performs well during a single assessment. The physician’s notes list diagnoses without describing daily deficits. Nobody wrote down the falls, the stove left on, the missed medications, or the fact that a daughter drives in from The Woodlands twice a day to manage it all.
The cure: document before the assessment, not after. Keep a dated log for two weeks covering bathing, dressing, toileting, transfers, eating, medication management, wandering and any behavioral incidents. Ask the treating physician to record functional limitations rather than diagnoses alone. If the determination is negative, there is an appeal path – use it, and ask the Houston-Galveston Area Council Area Agency on Aging, which serves Montgomery County, for help preparing. That help is free and independent.
Denial 2: the mineral interest nobody thought was an asset
This is a Texas problem and it is a real one in Montgomery County, where inherited mineral and royalty interests are common and frequently forgotten.
A mineral interest is a countable resource. A producing royalty interest generates income, which affects the income test. A non-producing mineral interest is still property with a market value, and HHSC will want it valued. Families do not think of it as an asset because it does not appear on a bank statement and because it was inherited in fractions from a grandparent alongside eleven cousins – but it appears in county deed records, and the royalty checks appear in bank statements and tax returns, both of which HHSC reviews across the full look-back.
The valuation problem is genuine. A fractional non-producing interest has no obvious market price, and HHSC cannot approve an application against an unvalued asset. Applications sit in limbo while a family tries to establish what a one-ninety-sixth interest in a tract in another county is worth.
The cure: pull the county deed records and locate every mineral and royalty interest the applicant holds – including inherited fractions – before filing, and start the valuation early. If an interest is genuinely worthless or unsaleable, that has to be established with evidence rather than asserted. Do not transfer or quitclaim a mineral interest to a relative to make it disappear: that is an uncompensated transfer inside the 60-month look-back and produces a penalty period on top of the original problem. Take this to a Texas elder law attorney with oil and gas experience – it is a narrower specialty than general elder law.
Denial 3: a Miller Trust that exists but does not work
Texas is an income-cap state. If an applicant’s monthly gross income exceeds the special income level – roughly three times the SSI federal benefit rate, in the neighborhood of $2,900 a month as of 2026 – the applicant is over the line regardless of how little is in the bank, unless a Qualified Income Trust is established. In Texas this is universally called a Miller Trust.
Most Conroe families who get this far know they need one. The denials come from the trust not functioning:
- It was drafted and never funded. The pension and Social Security keep depositing into ordinary checking while the trust account sits at zero. The trust must actually receive the income.
- Only one income source was routed through it. A household with a pension, Social Security and a royalty check needs all the over-cap income handled, not the largest piece.
- A month was missed. Funding has to happen every month without gaps. A single missed month can cost eligibility for that month.
- The disbursements were wrong. Money leaving the trust has to follow the permitted order, and the trust must provide for the state to be reimbursed from what remains at death.
The cure: have a Texas elder law attorney draft it – never a template – then set the deposits up as automatic transfers and verify them monthly against the bank statement. Ask HHSC to confirm the deposit and disbursement mechanics in writing for your case. A Miller Trust is not paperwork you file and forget; it is an ongoing monthly obligation for as long as the person is on the program.
| Denial reason | What triggers it in Montgomery County | Cure |
|---|---|---|
| Level of care denied | Records understated daily functional and cognitive needs | Two-week assistance log; physician documents limitations; appeal |
| Mineral or royalty interest | Inherited fractional interests are countable and hard to value | Pull deed records and start valuation before filing; never quitclaim to relatives |
| Miller Trust not funded | Trust drafted but pension still deposits to ordinary checking | Automate deposits, route every over-cap source, verify monthly |
| Homestead misunderstanding | Belief that Texas’s unlimited homestead exemption applies to Medicaid | It does not; a federal equity cap and estate recovery both apply |
| Second property | Lake house, rental or inherited acreage counts at fair market value | Value every parcel before filing |
| Failure to verify | Carrier cash value statement misses the HHSC deadline | Order documents before filing; request an extension in writing |
| Life insurance cash value | Combined face value over $1,500 makes all cash value countable | Price settlement, reduced paid-up, irrevocable funeral contract and ADB rider first |
Denial 4: the homestead misunderstanding, and the rest of the property
Return to where this page started, because it drives real decisions in Montgomery County.
Texas’s unlimited homestead exemption is a creditor-protection rule under Texas law. It is not a Medicaid rule. For Medicaid eligibility, the occupied home is excluded while the applicant lives there or intends to return, and while a spouse, a child under 21, or a disabled adult child lives in it – but the exclusion is capped by equity. Texas applies the lower federal home equity limit, in the neighborhood of $750,000 as of 2026 and indexed annually. Confirm the current figure with HHSC. For most Conroe households that cap is not binding; for a waterfront property on Lake Conroe or a large acreage tract, it can be.
What is more likely to bite here is the second property. Only the primary residence is excluded. A lake house, a rental, a hunting lease property, inherited acreage in another county – each is countable at fair market value. Montgomery County families frequently hold one of these and are surprised it counts.
Then there is the back end. The Texas Medicaid Estate Recovery Program may seek repayment from the probate estate after death, which means the homestead that was excluded during life is what the state looks to afterward. Texas recognizes exceptions – a surviving spouse, a surviving child under 21 or disabled, an undue hardship claim, and Texas rules that limit recovery when the estate or recoverable amount is small – but they are exceptions. The point is simply that “the homestead is protected in Texas” is not a plan. An elder law attorney licensed in Texas is the person to build one.
Denial 5: the verification packet, and the STAR+PLUS interest list
Two procedural realities that cost Conroe families time and money.
Verification. HHSC sets a deadline for documents and denies for failure to verify when it passes, without regard to whether the applicant would have qualified. The packet includes bank and brokerage statements covering the full 60-month look-back, deeds and property records for every parcel and mineral interest, vehicle titles, trust instruments, proof of every income source, and a carrier statement of cash surrender value on every life insurance policy. That last item reliably arrives late – three to six weeks is normal, and a policy issued decades ago by a company since acquired can take longer. Order everything the week you decide to apply, request an extension in writing if a third party’s delay will blow the deadline, and if a denial issues, appeal and reapply simultaneously.
The interest list. Texas operates its home and community based waiver services through interest lists, and the waits have historically been measured in years rather than months. A Conroe family hoping to keep a parent at home through STAR+PLUS waiver services needs to understand that the list is the constraint, not eligibility. A covered nursing facility bed, by contrast, is available to those who qualify. That asymmetry pushes families toward institutional care they did not want.
The cure: get on the relevant interest list the moment a need is foreseeable, even years out – it costs nothing and the clock only runs once you are on it. Then ask the Houston-Galveston Area Council Area Agency on Aging what Older Americans Act services run in Montgomery County right now: nutrition, transportation, caregiver respite and options counseling carry no Medicaid eligibility test at all.
Denial 6: the life insurance policy
Life insurance is measured by total face value in aggregate. If every permanent policy on the applicant’s life adds up to $1,500 or less in face value, all of them are excluded as burial insurance and their cash value is ignored. The moment the combined face value crosses $1,500 – all policies added together, not one at a time – the exclusion falls away and the entire cash surrender value becomes a countable resource against the $2,000 limit. Term insurance carries no cash value and is generally not a countable resource, though it holds real economic value worth measuring before anyone lets it lapse. Our explainer on life insurance as a Medicaid asset walks the aggregation rule.
Four routes, and surrender is the weakest. A life settlement sells the contract to a licensed institutional buyer, often for materially more than the insurer will pay – the proceeds are countable cash, so timing against the application matters, and the sale must be arm’s length at fair market value or the look-back treats the shortfall as a transfer. A reduced paid-up election keeps a smaller guaranteed death benefit with no more premiums; running reduced paid-up against a settlement costs nothing and often changes the answer. An irrevocable prepaid funeral contract can absorb the policy into the excluded column – and note that Texas families told to “prepay the funeral” frequently buy a revocable plan, which the applicant can cash in and which therefore stays countable, spending the money without solving the test. An accelerated death benefit rider, if already attached to the contract, pays without any sale.
Selling is the wrong answer when combined face value already sits inside the $1,500 burial exclusion, because there is nothing to solve; when the policy has been irrevocably assigned to a funeral provider; when the insured is in good health, because life expectancy underwriting will return a weak offer and the policy is worth more held; and when a surviving spouse will need the death benefit to live on after the applicant dies.
The broader rule: a compliant spend-down converts countable resources into excluded ones – retiring the mortgage on the homestead, making accessibility repairs, replacing a vehicle, paying genuine medical, dental and legal bills, clearing debt, buying irrevocable burial arrangements. Nothing is given away, so nothing generates a penalty.
What care costs in Conroe, and who to call
Cost-of-care survey ranges for the Houston-The Woodlands-Sugar Land metropolitan area, which includes Montgomery County, put a private skilled nursing room at roughly $7,500 to $8,700 a month as of 2026, semi-private roughly $6,000 to $7,000, and assisted living at roughly $4,800 to $5,600 a month. The Texas statewide median runs a little lower – broadly $7,000 to $8,000 for a private nursing room and $4,300 to $5,000 for assisted living. Texas remains one of the least expensive states in the country for nursing care against a national median near $10,000 to $11,000, and the Houston region sits modestly above the Texas median. These are survey ranges, not quotes; ask three facilities for their current private-pay daily rate in writing.
The local pressure is not price – it is growth. Conroe has been among the fastest-growing cities in the country in recent years, and retiree in-migration around Lake Conroe and The Woodlands has pushed Montgomery County’s 65-and-over population up quickly. Facility capacity has not expanded at the same rate, which means the list of local facilities with an available Medicaid-certified bed is shorter than the facility count implies. Build that list before eligibility is decided.
The calls to make: Texas HHSC through YourTexasBenefits.com or a benefits office serving Montgomery County, to open the application and confirm every figure on this page; the Houston-Galveston Area Council Area Agency on Aging for free options counseling, interest list guidance and Older Americans Act services; and the Texas Health Information, Counseling and Advocacy Program (HICAP), the state’s SHIP, for independent Medicare, Medigap and long-term care coverage counseling. For an insurer’s or a settlement provider’s licensing and conduct, the regulator is the Texas Department of Insurance. For a Miller Trust, mineral interests, deeds, transfers and appeals, retain a Texas elder law attorney – nothing on this page is legal, tax or eligibility advice, and only HHSC can decide eligibility. Pine Lake Life Solutions does not purchase policies and is not licensed in every state; what we provide is a free policy review so an old contract carries a real number before anything is signed.
Frequently Asked Questions
Does the Texas homestead exemption protect a house from Medicaid?
No. Texas’s unlimited homestead exemption is a creditor-protection rule under state law and does not govern Medicaid eligibility or estate recovery. For eligibility, the occupied home is excluded only up to a federal home equity limit, in the neighborhood of $750,000 as of 2026 for states using the lower figure. The Texas Medicaid Estate Recovery Program may then pursue the probate estate after death.
Where does a Conroe, Texas resident apply for long-term care Medicaid?
With Texas Health and Human Services, which administers Medicaid eligibility at the state level – there is no Montgomery County Medicaid office. Apply through YourTexasBenefits.com, by phone, or at an HHSC benefits office serving the county. The Houston-Galveston Area Council Area Agency on Aging, which covers Montgomery County, provides free help assembling the application.
Do inherited mineral rights affect a Texas Medicaid application?
Yes. A mineral or royalty interest is a countable resource, a producing interest also generates income affecting the income test, and both appear in county deed records, bank statements and tax returns that HHSC reviews. Fractional inherited interests are the common case in Montgomery County and are difficult to value, which can stall an application. Never quitclaim one to a relative; that is a transfer with a penalty.
Why does a Miller Trust fail even when one exists?
Usually because it is not funded. The trust must actually receive the over-cap income every month, from every source, without gaps, and disbursements must follow the permitted order. Families draft the trust and then let the pension continue depositing into ordinary checking. Set the transfers up automatically, verify them against the bank statement monthly, and ask HHSC to confirm the mechanics in writing.
How much does nursing home care cost in Conroe in 2026?
Survey ranges for the Houston-The Woodlands-Sugar Land metro, which includes Montgomery County, put a private skilled nursing room at roughly $7,500 to $8,700 a month as of 2026, semi-private around $6,000 to $7,000, and assisted living around $4,800 to $5,600. The Texas statewide median runs slightly lower. Texas remains one of the least expensive states nationally for nursing care.
What is the STAR+PLUS interest list and why does it matter?
Texas delivers home and community based waiver services through interest lists rather than immediate enrollment, and waits have historically run in years. A family hoping to keep a parent at home faces the list as the real constraint, while a covered nursing facility bed is available to those who qualify. Join the relevant interest list as soon as a need is foreseeable, since the clock only starts once you are on it.
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Related Reading
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- Life Insurance Counts Medicaid Asset
- Reduced Paid Up Vs Settlement
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.