Medicaid Spend-Down in Georgetown, Texas (2026): Six Steps, and Only Two Involve Williamson County

Step one: get clear on who decides what

Four different entities have a role, and confusing them is the first ordering mistake.

Texas Health and Human Services Commission (HHSC) decides financial eligibility. Applications go through YourTexasBenefits online, by mail, by phone, or in person at an HHSC benefits office; the nearest offices to Georgetown are in the Williamson County and north Austin area. Nursing facilities routinely submit on a resident’s behalf.

The managed care plan delivers the benefit. STAR+PLUS is Texas’s managed long-term services and supports program covering adults who are 65 or older or who have disabilities, including the STAR+PLUS Home and Community Based Services waiver. Nursing facility residents are also enrolled in STAR+PLUS for their acute care.

The Area Agency on Aging for Williamson County is operated by the Capital Area Council of Governments in Austin. It provides free benefits counseling, care coordination and caregiver support, and it houses Texas’s State Health Insurance Assistance Program, the Health Information, Counseling and Advocacy Program (HICAP).

The Texas Department of Insurance regulates carriers and licenses life settlement providers and brokers operating in the state. Our Texas licensing page summarizes how that framework works.

Williamson County’s role is real but narrow: the county’s Sheriff, courts and clerk handle guardianship filings, probate, and deed records, all of which show up in a spend-down file. It is not where you apply.

Step two: the level-of-care determination, which the facility drives

Financial eligibility is only half the test. Texas also requires a determination that the applicant medically needs nursing facility level of care. For a nursing facility applicant that determination flows from the facility’s own assessment submission; for a community applicant seeking STAR+PLUS HCBS waiver services it comes through the managed care plan’s assessment.

This step is easy to leave until last and expensive to leave until last, because the financial clock and the medical clock run in parallel. A family that spends four months perfecting the financial side and only then starts the medical necessity process has effectively added four months of private-pay bills. Ask the facility, on day one, who is submitting the level-of-care documentation and when.

If the goal is care at home rather than in a facility — which is the goal for a large share of Georgetown families whose parent wants to stay in the house — note that the STAR+PLUS HCBS waiver has capacity limits and interest lists. Getting a name on an interest list costs nothing and can be done long before anyone is ready to apply. Not doing it early is one of the quieter out-of-order mistakes.

Step three: Texas’s income cap and the deadline attached to it

Texas is an income-cap state. As of 2026 the special income standard for long-term care Medicaid is roughly $2,982 per month for a single applicant, three times the SSI federal benefit rate. Income above that line disqualifies an applicant outright regardless of how little they own, unless it is handled.

The handling mechanism is a Qualified Income Trust. Income above the cap is deposited to the trust each month and, correctly structured and administered, is not counted against the limit. The deadline is the part that catches people: the trust generally has to be established and funded for each month in which eligibility is claimed. Establish it in April and you have not fixed February and March. Those months stay private-pay.

A Georgetown retiree with a corporate pension from a career elsewhere, plus Social Security, clears $2,982 easily while holding modest savings. That household is simultaneously over on income and near the line on assets, and needs the trust before it needs a spend-down. Current Texas figures are collected on our Texas limits page; the trust itself should be drafted by a Texas elder law attorney rather than assembled from a template.

Option for a permanent policy	What it produces	Effect on Medicaid countable assets	Reversible?
Surrender to the carrier	The contract’s cash surrender value, less any surrender charge and loan	Converts cash value into countable cash	No
Life settlement with a licensed provider	A market price, which for an older or health-impaired insured can exceed surrender value	Converts the policy into countable cash; timing matters against the filing date	No, once completed
Reduced paid-up election	A smaller guaranteed death benefit with no further premiums	Reduces but does not eliminate countable cash value	Generally no
Irrevocable funeral trust	A prepaid, exempt burial arrangement within Texas limits	Moves countable dollars into an exempt category	No, by design
Keep the policy in force	The full death benefit for the family	Cash value stays countable unless the burial exclusion applies	Yes

Step four: the asset test, and Texas’s unusually strong homestead rule

As of 2026 the individual countable-asset limit for Texas Medicaid long-term care is $2,000. Confirm the current figure with HHSC. When one spouse stays home, the community spouse resource allowance protects a share of the couple’s combined countable assets up to a federal maximum near $162,660 for 2026, with a separate floor.

Countable: bank and brokerage accounts, CDs, a second property, mineral interests, retirement accounts depending on payout status, and permanent life insurance cash value once face-value aggregation is triggered. Generally not countable: the homestead subject to the federal home equity cap and to spousal or intent-to-return rules, one vehicle, household goods, an irrevocable prepaid funeral, and a burial fund within limits.

Texas homestead law is genuinely different from most states. The Texas Constitution protects a homestead from most creditors without a dollar cap on value, with acreage limits — broadly, up to ten acres for an urban homestead and substantially more for a rural one. That protection is not a Medicaid rule, and it does not override the federal home equity cap that applies to Medicaid eligibility, but it does change what happens to the house afterward, which is why Texas estate recovery outcomes often look different from those in other states. Mineral interests, common in Texas title histories, are a separate countable asset that families routinely forget to disclose — and an undisclosed royalty stream discovered later is a credibility problem for the entire application.

Step five: the life insurance decision, in its proper place

Life insurance belongs at step five, not step one. Texas applies face-value aggregation: HHSC totals the face amount of every life insurance policy on the applicant’s life, and if the aggregate is at or below the small-policy threshold used in the SSI-linked rules, the cash value inside is disregarded. Above that threshold, the cash surrender value of every permanent policy is countable. Term insurance has no cash value and is not itself a resource, but its face amount still counts in the aggregation test. Confirm the current threshold with HHSC.

Against a $2,000 limit, a Georgetown retiree carrying a $150,000 whole life policy with $35,000 of cash value has a disqualifying asset that has to be dealt with. The table below compares the four real options. The one thing that is almost never right is doing the fastest one first without pricing the others, because surrender is irreversible. Our comparison of reduced paid-up coverage against a settlement covers that trade-off in detail, and how a policy counts as a Medicaid asset covers the aggregation mechanics.

Four situations where selling is the wrong answer. When the aggregate face value is small enough that the policy already sits inside the burial exclusion — you would be liquidating an exempt asset to solve a problem that does not exist. When the insured is in good health, because the secondary market prices health and offers on a healthy insured commonly land at or below surrender value. When a surviving spouse in Georgetown will need the death benefit to keep the house and pay Williamson County property taxes on it. And when the policy is trust-owned or carries an irrevocable beneficiary designation, so the person weighing the sale may not have the authority to make it.

Readers considering a sale on its own merits, separate from Medicaid, will find that covered on our Georgetown life settlements page.

Step six: file, then understand what Texas MERP actually pursues

File once the trust is funded, the level-of-care documentation is moving, and the financial records are assembled. Coverage can be retroactive for up to three months before the application month when the applicant would have qualified in those months. Families who wait until the last dollar is gone routinely forfeit that.

Texas’s Medicaid Estate Recovery Program (MERP), administered by HHSC, seeks reimbursement after the death of a recipient who was 55 or older and received long-term care services. Two features distinguish it. First, Texas recovers from the probate estate rather than using the expanded definition some states adopted. Second, HHSC publishes de minimis thresholds below which it will not file a claim — commonly cited as estates valued at or under $10,000 and recoverable amounts at or under $3,000 — and it will not pursue recovery when the cost of recovery would exceed what could be recovered. Confirm the current thresholds with HHSC, since they can change.

Recovery is also barred or deferred where a surviving spouse is living, where a surviving child is under 21 or is blind or disabled, or where an unmarried adult child has continuously resided in the home for at least a year before the recipient’s death. Undue hardship waivers exist and must be requested within a stated period after the MERP notice arrives — a deadline that runs during the worst weeks a family will have. Put someone in charge of watching for that letter. Our overview of how estate recovery works covers the general framework.

Georgetown’s numbers, and the local fact that changes the arithmetic

Georgetown sits inside the Austin–Round Rock market, and Austin-area care costs run visibly above the Texas median while Texas itself is one of the least expensive long-term care states in the country.

Cost-of-care surveys have placed a semi-private nursing home room in the Austin metropolitan area in roughly the $6,000–$7,200 per month range as of 2026 planning figures, with private rooms roughly $7,500–$8,800. Assisted living in the Georgetown and north Austin corridor commonly runs roughly $4,800–$5,800 per month, with memory care above that. The Texas statewide median for a semi-private room is commonly cited well below the metro figure, in roughly the $5,400–$6,300 band, with assisted living statewide around $4,200–$4,900. A Georgetown family that plans against a Texas average will be roughly $700 to $1,000 a month short. These are survey ranges, not quotes — get written rates and check CMS Care Compare.

The genuinely local fact: Georgetown’s older population is concentrated in a large master-planned active-adult community, which pushes the city’s 65-and-over share far above the Texas average and produces a very particular financial profile. These households typically own a paid-off house purchased with proceeds from a more expensive state, carry an out-of-state pension, and hold permanent life insurance bought decades ago in a different market. That combination — income over the cap, an exempt homestead, and a countable policy as the main liquid asset — is exactly the profile that makes step three and step five of this sequence decisive, and it is why the standard Texas advice about a $2,000 limit understates how much planning a Georgetown family actually needs.

Our Georgetown nursing home cost page works the months-of-care arithmetic in more detail.

Pine Lake Life Solutions does not purchase policies and does not give legal, tax or Medicaid-eligibility advice. We read a policy and tell a family what it is genuinely worth before an irreversible decision gets made — a free policy review, no obligation. Eligibility questions belong with HHSC, the Capital Area Council of Governments Area Agency on Aging, HICAP, or your own Texas elder law attorney.

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Frequently Asked Questions

Does Williamson County handle Medicaid applications for Georgetown, Texas residents?

No. Texas does not administer Medicaid at the county level. The Texas Health and Human Services Commission decides eligibility, through YourTexasBenefits online or at an HHSC benefits office serving the Williamson County area. Williamson County’s role is limited to courts, probate, guardianship and deed records. Free counseling comes from the Capital Area Council of Governments Area Agency on Aging and from HICAP.

What is Texas Medicaid’s income limit for long-term care in 2026?

As of 2026 the special income standard is roughly $2,982 per month for a single applicant, three times the SSI federal benefit rate. Texas is an income-cap state, so income above that line disqualifies outright unless a Qualified Income Trust is established and funded for each month eligibility is claimed. Setting it up late does not fix earlier months. Confirm current figures with HHSC.

Does Texas homestead protection keep the house safe from Medicaid estate recovery?

Partly, and not automatically. Texas constitutional homestead protection has no dollar cap and shields the homestead from most creditors, which changes outcomes compared with other states, but it is not a Medicaid eligibility rule and does not override the federal home equity cap. Texas MERP recovers from the probate estate and has published de minimis thresholds and hardship waivers. Ask a Texas elder law attorney about your specific title.

What is the Texas asset limit and does a mineral interest count?

As of 2026 the individual countable-asset limit is $2,000, with a community spouse resource allowance up to a federal maximum near $162,660. Mineral and royalty interests are countable resources, and they are among the most commonly overlooked items in Texas files. Disclose them at the outset; a royalty stream discovered later undermines the credibility of the whole application.

How much does long-term care cost in Georgetown compared with the Texas median?

Cost surveys place a semi-private nursing home room in the Austin metro at roughly $6,000 to $7,200 per month as of 2026 and assisted living at roughly $4,800 to $5,800, while the Texas statewide medians run roughly $5,400 to $6,300 and $4,200 to $4,900 respectively. Planning against a statewide average leaves a Georgetown family short by several hundred dollars monthly. Request written rates.

Is surrendering a whole life policy the fastest way to qualify?

It is the fastest, which is not the same as the best. Surrender produces the carrier’s number and is irreversible. For an older insured or one whose health has declined since underwriting, a life settlement may produce more, and a reduced paid-up election or an irrevocable funeral trust can each solve part of the problem. Price the alternatives before you sign a surrender form.

Related Reading

• Nursing Home Costs Georgetown Tx
• Life Settlements Georgetown Tx
• Texas Medicaid Asset Income Limits
• Life Settlement Licensing Texas
• Nursing Home Medicaid Spend Down
• Life Insurance Counts Medicaid Asset
• Reduced Paid Up Vs Settlement
• What Is Medicaid Estate Recovery

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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.