A Medicaid long-term care application filed from Fredericksburg, Texas is decided on paperwork, not on conversation — and the folder most Gillespie County families cannot produce is the one holding sixty months of bank statements and every life insurance policy in the household. Fredericksburg is the county seat of Gillespie County, in the Texas Hill Country about seventy miles west of Austin and sixty-five miles north of San Antonio. The city does not run Medicaid eligibility and neither does the county. Texas administers its program at the state level through the Texas Health and Human Services Commission (HHSC), so the application goes to HHSC — online through YourTexasBenefits, by mail, or in person at an HHSC benefits office serving Gillespie County, the nearest of which are in the Fredericksburg and Kerrville area. There is no Gillespie County Medicaid eligibility office, and families who spend a week looking for one lose a week of retroactive coverage.
The program itself has two faces. STAR+PLUS is the Texas Medicaid managed-care program that covers long-term services and supports for adults who are aged or have disabilities, including the STAR+PLUS Home and Community Based Services waiver. Institutional care in a licensed nursing facility runs through the Medicaid nursing facility program. Both are means-tested. As of 2026 the countable-asset ceiling for a single applicant is $2,000; confirm the current figure with HHSC before you rely on it, because these numbers move with federal indexing and state rule changes. Everything below is organized the way HHSC actually reads a file: folder by folder. Build the folders and the decisions become obvious. Skip a folder and you get a request for information with a two-week clock on it.
In This Article
- Folder 1 — identity, residency and who is allowed to sign
- Folder 2 — income, and why Texas builds a Miller trust
- Folder 3 — sixty months of statements, the folder nobody has
- Folder 4 — the life insurance folder and the face-value aggregation rule
- Folder 5 — the options folder: four exits from a countable policy
- When selling the policy is the wrong answer in Gillespie County
- Folder 6 — the cost file: what care actually runs in the Hill Country
- Where to file, who to call, and what happens after
- Frequently Asked Questions
Folder 1 — identity, residency and who is allowed to sign
The first folder is the one families assume is trivial and then cannot complete. HHSC needs proof of identity and Texas residency for the applicant, a Social Security number, proof of citizenship or qualified immigration status, and Medicare card information if the applicant has Medicare. In Fredericksburg this folder has a particular wrinkle: a large share of Gillespie County’s older homeowners moved to the Hill Country from Houston, Dallas or San Antonio after retirement, and many still hold a driver’s license, a mailing address or a bank relationship in the metro they left. Mixed addresses across documents trigger a verification request every time.
The signature question matters more. If the applicant has dementia or is already in a facility, someone else has to sign the application and, later, sign anything touching a life insurance policy. That authority has to exist in writing before the packet goes in — a durable power of attorney, a guardianship, or an authorized-representative designation filed with HHSC. A general durable power of attorney is not automatically sufficient to change or transfer an insurance contract; carriers frequently demand specific language granting authority over insurance. If you are not certain what your document authorizes, have your own elder law attorney read it before you make any move. Fixing an authority problem after a denial costs months.
Folder 2 — income, and why Texas builds a Miller trust
Texas is an income-cap state. There is a hard monthly income ceiling for institutional Medicaid and for the STAR+PLUS waiver, indexed each year to a multiple of the federal SSI benefit; as of 2026 it sits just under $3,000 a month for a single applicant, and HHSC publishes the exact figure annually. Being one dollar over the cap does not mean the family is too wealthy for Medicaid — it means the file needs a Qualified Income Trust, which Texas calls a QIT and everyone else calls a Miller trust. Income above the cap is deposited into the QIT each month and spent under Medicaid’s rules.
The folder itself should hold twelve months of Social Security award letters and benefit statements, any pension or annuity statements, VA benefit letters, mineral and royalty income statements, and rental income records. That last one is not boilerplate here. Gillespie County carries an unusually high concentration of short-term rental and vineyard-adjacent property income relative to its population, and a guest-house rental the family thinks of as pocket money is countable income with a paper trail HHSC will find. Bring it forward yourself rather than letting a caseworker discover it in a deposit pattern.
One structural point about the QIT: it must be established and funded in the month you want coverage to begin. A trust signed in April does not fix March. That single sequencing rule is responsible for a large share of Texas denials that families experience as arbitrary.
Folder 3 — sixty months of statements, the folder nobody has
This is the folder that stops applications in Fredericksburg. The federal look-back for long-term care Medicaid is 60 months, and Texas applies it. HHSC can ask for five years of statements on every checking account, savings account, certificate of deposit, brokerage account, credit union account and safe deposit box the applicant has held or had access to — including accounts closed during that window and accounts jointly titled with an adult child.
Two things make this harder in the Hill Country than in a metro. First, several of the institutions Gillespie County families have banked with for decades are small regional banks and credit unions that purge online statement history after a shorter retention window than the national banks do; retrieving five years often means a written records request and a per-statement fee. Start it the day you start the packet, not the day HHSC asks. Second, farm and ranch accounts commingle personal and operating money. Equipment sales, cattle sales and land transactions inside the look-back all read as transfers until they are documented as arm’s-length.
What HHSC is hunting for is uncompensated transfers. A gift to a grandchild for a wedding, a below-market land transfer to a child, adding a child’s name to a deed, or paying a family member for caregiving without a written personal-services agreement all create a transfer penalty. The penalty is a period of ineligibility calculated by dividing the transferred value by the state’s average daily private-pay nursing facility rate, and — this is the part that surprises people — the penalty clock does not start until the applicant is otherwise eligible and applying. Giving money away and then waiting quietly does not run the clock out. The mechanics are laid out in the Medicaid look-back period explained.
Folder 4 — the life insurance folder and the face-value aggregation rule
Almost no family builds this folder correctly, because almost no family knows the rule. Medicaid does not ask first what a policy is worth on the open market and it does not ask what you paid. It applies a face-value aggregation test: add up the total face amount of every life insurance policy the applicant owns. If the combined face value is at or under $1,500, the cash value is excluded as a burial resource. If the combined face value exceeds $1,500, the entire cash surrender value of every permanent policy becomes a countable asset, dollar for dollar, against the $2,000 ceiling.
Aggregation is what catches people. A $1,000 burial policy sold by a funeral home, a $10,000 whole life policy bought in 1978 and a $150,000 universal life policy bought at 55 are not three separate questions. They are one number, and one number over $1,500 pulls all the cash value into the count. Term insurance with no cash value is generally not countable as an asset — though it is also generally useless as a spend-down resource unless it is convertible, which is a separate analysis. The general rule across states is summarized in how life insurance counts as a Medicaid asset.
This folder should contain, for every policy: the policy number and issuing carrier, the current declarations page, a written statement of face amount and current cash surrender value, any outstanding policy loan balance, and — the document families never request — a current in-force illustration showing how long the policy survives at various premium levels. HHSC will accept a carrier statement of cash value. You need the in-force illustration for a different reason: it is the only document that tells you whether the policy is worth more than its surrender check.
| Packet folder | What HHSC actually wants | What Fredericksburg families rarely have |
|---|---|---|
| 1. Identity & authority | ID, Texas residency, SSN, Medicare card, written authority to act | A consistent address across documents after a move to the Hill Country; POA language a carrier will accept |
| 2. Income | 12 months of Social Security, pension, VA, annuity, rental and royalty statements | Documentation of short-term rental or guest-house income; a QIT funded in the correct month |
| 3. Assets & look-back | 60 months of statements on every account, open or closed | Statement history from small regional banks that purge online archives; ranch and personal accounts separated |
| 4. Life insurance | Face amount and cash value for every policy, with total face aggregated | An in-force illustration; awareness that a $1,000 burial policy counts toward the $1,500 test |
| 5. Options taken | Written record of surrender, reduced paid-up, irrevocable funeral trust or sale | Any comparison at all before the surrender form was signed |
| 6. Cost of care | Written facility rate and level-of-care documentation | Local Fredericksburg rates rather than the Texas median; a runway calculated in months |
Folder 5 — the options folder: four exits from a countable policy
Once a policy is countable, surrender is only one of four exits, and it is frequently the worst of them. Build a page in the packet that names each one and why you did or did not take it.
- Surrender. Take the cash value, spend it on care, document the spending. Simple, fast, and it destroys the death benefit permanently for whatever the carrier decides the cash value is.
- Reduced paid-up. Many whole life contracts let the owner stop paying premiums and convert to a smaller, fully paid death benefit. This reduces face value and may reduce cash value, and in some situations brings the aggregate face amount under the burial threshold. It is a contractual right, not a favor. Compare it honestly against a sale in reduced paid-up versus a settlement.
- An irrevocable funeral trust or irrevocable burial contract. Texas permits properly irrevocable prepaid funeral arrangements to be excluded from countable assets within state limits. Assigning policy proceeds to a licensed funeral provider under an irrevocable contract is a recognized planning move — with a documented cap, and with rules your funeral provider and attorney should confirm in writing.
- A life settlement. Selling the policy to a licensed institutional buyer for more than the surrender value converts the policy into cash, which is then countable and must be spent down under the same rules — but it can be materially more cash than the carrier would have paid. Texas regulates the transaction; the framework is summarized in Texas life settlement licensing, and the local market context is in life settlements in Fredericksburg.
Pine Lake Life Solutions does not purchase policies and is not licensed in every state. What is available here is a free policy review — an independent read of the in-force illustration and the face-value math so the family can compare the four exits with real numbers instead of guesses.
When selling the policy is the wrong answer in Gillespie County
Say this plainly, because the settlement industry rarely does. A sale is the wrong move in at least four common situations.
Small face amounts. If the aggregate face value is $10,000 or $15,000, the transaction costs of a settlement usually consume any advantage over surrender, and the policy may already sit close to the burial exclusion after a reduced paid-up election. A policy already inside the burial exclusion. If total face value is at or under $1,500, or the policy is already irrevocably assigned to a funeral provider, the asset problem is solved and a sale creates a countable pile of cash where there was none. A healthy insured. The secondary market prices on life expectancy. A 72-year-old in good health with a long life expectancy draws weak offers or none, and the exercise burns months of HIPAA authorizations and medical record retrieval. A policy a surviving spouse needs. If the community spouse will depend on that death benefit for income or for her own future care, converting it to cash that Medicaid then requires be spent is a bad trade dressed up as a solution.
There is a fifth situation specific to families here: a policy pledged as collateral on a ranch note or a business loan cannot be sold out from under the lienholder without releasing the collateral assignment first, and that release is the lender’s decision, not the family’s.
Folder 6 — the cost file: what care actually runs in the Hill Country
The last folder tells you how much time you have. As of 2026, national and state cost-of-care surveys of the Genworth type put the Texas median for a private room in a skilled nursing facility in roughly the $8,000 to $8,600 a month range, semi-private rooms at roughly $5,600 to $6,200, and assisted living statewide at roughly $4,600 to $5,200 a month. Texas sits meaningfully below the national medians on both. These are survey ranges, not quotes; get written rates from the specific facility.
Fredericksburg does not track the Texas median. Gillespie County has one of the oldest resident populations in the state — a median age well above the Texas median and a 65-and-over share in the neighborhood of one in three residents, driven by decades of retirement in-migration into the Hill Country. That demand meets a thin local supply: a small county with a handful of licensed nursing and assisted living operators means little price competition and real waitlists, and it means many Fredericksburg families end up placing a parent in Kerrville, Boerne or San Antonio. Assisted living in and around Fredericksburg commonly prices at or above the Texas median rather than below it, in the roughly $4,800 to $6,000 range as of 2026, with a further premium for memory care.
The second local factor is housing. Hill Country property values in and around Fredericksburg rose sharply through the 2020s on tourism and second-home demand, and that cuts two ways. The home is generally an exempt asset while the applicant intends to return or a spouse lives there, but as of 2026 Texas applies the federal minimum home-equity ceiling of $752,000; equity above that ceiling blocks coverage of long-term services and supports until it is addressed. Across most of Texas that ceiling is academic. On acreage west of Fredericksburg it is not. Confirm the current figure and how it applies to your property with HHSC and your own attorney.
Run the arithmetic before you decide anything: divide liquid assets by the real monthly rate to get a runway in months. The local version of that math is in nursing home costs in Fredericksburg, and the national framework is in nursing home Medicaid spend-down.
Where to file, who to call, and what happens after
Applications go to HHSC. You can file online through YourTexasBenefits, by mail, or in person at an HHSC benefits office; there is no separate Gillespie County Medicaid office. For help that is free and is not selling anything, the Alamo Area Agency on Aging, operated through the Alamo Area Council of Governments, is the Area Agency on Aging serving Gillespie County, and it hosts benefits counseling through the Texas Health Information, Counseling and Advocacy Program — the state’s version of the federal State Health Insurance Assistance Program. Counselors will walk a family through the packet at no charge. For insurance questions, and for confirming that any company contacting you is actually licensed, the regulator is the Texas Department of Insurance. State-level eligibility figures are collected in Texas Medicaid asset and income limits.
Two things happen after filing that families should expect. First, HHSC sends requests for information with short deadlines; missing one is the most common cause of a denial that had nothing to do with eligibility. Second, if coverage is approved, Texas will later pursue Medicaid estate recovery against the estate of a deceased recipient who was 55 or older when long-term care services were received. Texas runs a comparatively narrow recovery program with hardship waivers and exemptions, and it is administered by HHSC. Ask about it in writing at application, not after a death.
Nothing on this page is legal, tax or Medicaid-eligibility advice. Rules change, and eligibility turns on facts a webpage cannot see. Take the packet to your own elder law attorney and to HHSC, and use the free benefits counseling the Area Agency on Aging already provides.
Frequently Asked Questions
Which county office takes a Medicaid application from Fredericksburg, Texas?
None does. Fredericksburg is the county seat of Gillespie County, but Texas administers Medicaid at the state level through the Texas Health and Human Services Commission. Applications are filed online through YourTexasBenefits, by mail, or in person at an HHSC benefits office serving Gillespie County — the nearest are in the Fredericksburg and Kerrville area. There is no Gillespie County Medicaid eligibility office to visit.
What is the countable-asset limit for Texas Medicaid long-term care in 2026?
As of 2026 a single applicant for STAR+PLUS long-term services or Medicaid nursing facility coverage generally must hold countable assets at or under $2,000. The home, one vehicle, personal belongings and properly structured irrevocable burial arrangements are commonly excluded. Confirm the current figure directly with HHSC before acting, since these limits are revisited annually and each exclusion carries its own separate dollar cap.
Does my mother’s life insurance count against the $2,000 limit?
It depends on total face value, not on cash value first. Add the face amounts of every policy she owns. If the combined face value is $1,500 or less, cash value is excluded as a burial resource. If the combined face value exceeds $1,500, the full cash surrender value of every permanent policy becomes countable. Term policies with no cash value are generally not counted as assets.
What does a nursing home actually cost in and around Fredericksburg?
As of 2026, cost-of-care surveys put the Texas median for a private skilled nursing room at roughly $8,000 to $8,600 a month and assisted living statewide near $4,600 to $5,200. Gillespie County’s thin facility supply and heavy retiree population push local assisted living toward or above the state median, commonly $4,800 to $6,000. These are ranges; get a written rate from the facility.
Is selling a life insurance policy ever the wrong move before applying?
Often. A sale is usually wrong when total face value is small, when the policy already sits inside the burial exclusion or is irrevocably assigned to a funeral provider, when the insured is healthy and life expectancy is long, or when a surviving spouse will need the death benefit. A sale converts a policy into cash that Medicaid then requires be spent, so run the comparison first.
How does the 60-month look-back affect gifts made to my children?
Texas reviews the 60 months before application for uncompensated transfers. Gifts, below-market land sales and unpaid family caregiving arrangements can create a penalty period computed from the transferred value and the state’s average private-pay nursing rate. Critically, the penalty does not begin until the applicant is otherwise eligible and applying, so waiting quietly after a gift does not run the clock out.
Will Texas take the house after my parent dies?
Texas pursues Medicaid estate recovery against the probate estate of recipients who were 55 or older when they received long-term care services, with hardship waivers and exemptions available. The home is generally exempt while the applicant intends to return or a spouse lives there, but recovery can reach it afterward. Ask HHSC for the current recovery rules in writing and consult your own elder law attorney.
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Related Reading
- Nursing Home Costs Fredericksburg Tx
- Life Settlements Fredericksburg Tx
- Texas Medicaid Asset Income Limits
- Life Settlement Licensing Texas
- Nursing Home Medicaid Spend Down
- Life Insurance Counts Medicaid Asset
- What Is The Medicaid Look Back Period
- What Is An In Force Illustration
- 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.