Medicaid Spend-Down in Midland County, Texas (2026)

Twelve Months Out: The Look-Back Starts Wherever You Are Standing

At twelve months out, the goal is not to qualify for anything. It is to stop doing damage and to get an attorney’s view while options still exist.

Three rules that apply from this moment forward:

1. Stop all gifts. Texas reviews transfers made in the 60 months before application, and any uncompensated transfer inside that window can create a penalty period — a stretch of months during which Medicaid will not pay for long-term care, computed by dividing the value transferred by a state-determined average cost of nursing facility care. Helping a grandchild with tuition, signing a truck over to a son, or paying a daughter “for looking after Dad” without a written agreement at a documented market rate all count. The facility bills throughout a penalty period, and in this county that is roughly $5,800 to $7,000 a month.
2. Do not change ownership of anything, including insurance policies. Transferring a life insurance policy, adding a child to a deed, retitling a bank account, or restructuring a partnership interest are all transfers that will be examined and valued.
3. See a Texas elder law attorney now, not later. Twelve months out is when the legitimate planning tools — spousal protections, permitted transfers, a properly structured arrangement for a disabled child — are still available. Six weeks out, most of them are gone.

Also at twelve months: get the medical picture documented. Texas nursing facility Medicaid and STAR+PLUS require a clinical determination of need, so a physician’s contemporaneous record of functional decline is worth building deliberately rather than reconstructing later.

And begin a written inventory. Every account, every property, every vehicle, every insurance policy, every business interest, and every institution the applicant has ever banked with. In a county where households have moved with the oil cycle, accounts frequently remain at institutions in other states, and locating them takes months.

Six Months Out: Income, the Cap, and the Trust

At six months, turn to income, because Texas is an income-cap state and this is where applications die.

Texas does not run a general medically needy spend-down for long-term care. It applies a hard institutional income cap, historically set at 300% of the federal SSI benefit rate and indexed annually — verify the 2026 figure with HHSC. If countable monthly income exceeds that cap by a dollar, nursing facility Medicaid and STAR+PLUS eligibility are denied outright. There is no partial credit and no averaging.

The remedy Texas provides is a Qualified Income Trust, commonly called a Miller Trust. Excess income is deposited each month into a dedicated trust account, the trust pays the cost of care and permitted expenses, and the state is named as remainder beneficiary. Income routed through a properly established trust is generally not counted against the cap. Three things make it unforgiving:

• It must be drafted correctly and actually funded. A signed document with no bank account and no deposits accomplishes nothing.
• It must be funded every single month, on time. A missed month can break eligibility for that month.
• It generally cannot be applied retroactively to earlier months. Every week of delay is a week of bills Medicaid will never pay.

At six months out you can find out whether you need one, have it drafted, and have the account open and waiting. That is the entire value of doing this stage early. Add up Social Security, any pension, royalty income — which in the Permian Basin is common and irregular, and which counts — annuity payments, and rental income, then compare the total to the current cap. Our Texas Medicaid asset and income limits page explains the framework; have an attorney do the drafting.

One Midland-specific note on royalties. Mineral and royalty interests are both an income stream and an asset, their value fluctuates with commodity prices, and they are frequently held through partnerships or trusts. Get them appraised and documented at this stage rather than at the application.

Ninety Days Out: Records, and the Business Interests

At ninety days, the work is documentary and it is heavy. Texas long-term care applications require extensive verification, generally reaching back five years.

Request in writing, now: five years of monthly statements for every bank, credit union, and brokerage account, including accounts closed during the period; five years of statements for any annuity; the deed and most recent tax statement for every property; titles for every vehicle; and current statements for every retirement account. Banks charge and take weeks. Where statements are genuinely unavailable, ask for a letter confirming the account’s closing date and balance.

Then the business interests, which is where Midland County files differ from almost anywhere else. If the applicant owns or owned an interest in a privately held company — an oilfield services firm, a small operator, a contracting business, a professional practice — the application needs:

• The entity’s organizing documents and any buy-sell agreement, including how a departing or deceased owner’s interest is valued and funded.
• Recent financial statements and tax returns for the entity.
• A record of any transfer, redemption or sale of the applicant’s interest in the last five years, with documentation of what was received in exchange. An interest sold for less than fair value is a transfer.
• A list of every insurance policy the entity owns or is a party to, including key-person coverage and any policy funding a buy-sell arrangement. Note carefully who the owner and beneficiary are — a policy the company owns on the applicant’s life is a company asset, not the applicant’s, and that distinction matters enormously. Get it documented rather than argued about later.

Also at ninety days: sort out authority. Confirm that a durable power of attorney exists, that it is broad enough to cover insurance and business interests, and that it names someone able to act. A power of attorney that omits authority over life insurance can stall a transaction for months.

Sixty Days Out: The Policies, Valued Not Guessed

Sixty days out is when the life insurance work has to happen, because everything after this point is too late for anything but a surrender.

For every policy on the applicant’s life, get in writing from the carrier: the current death benefit; the current cash surrender value as of a recent date; the amount payable net of any outstanding policy loan; who the owner and beneficiary are; how long the policy stays in force if premiums stop; and the full rider schedule.

That last item first, because it is free money that goes unclaimed. If the contract carries an accelerated death benefit, chronic illness, or long-term care rider and the insured meets its definition, it pays part of the death benefit early with generally favorable tax treatment and no third party involved. Read the rider schedule before considering anything else.

Then understand how Texas will treat what you have found. The caseworker does not simply compare cash value to the $2,000 resource limit. The analysis starts with total face value across every policy on the same insured. If that aggregate stays within the small burial exclusion, the policies are generally excluded from countable resources. If it exceeds the threshold, the exclusion is generally lost and the cash surrender value becomes a countable resource. Three $1,000 policies do not receive three exclusions — they aggregate. A term policy with no cash value is generally not counted at all, regardless of face amount. See how life insurance is counted as a Medicaid asset, and confirm current Texas figures with HHSC.

The four routes, and why sixty days is the deadline for three of them:

• Keep and do nothing. Available at any time. Often correct where a surviving spouse needs the benefit.
• Reduced paid-up election or partial surrender. Takes a few weeks with the carrier. Can bring aggregate face value down toward the exclusion threshold while preserving something.
• Irrevocable funeral arrangement. Texas permits certain irrevocable prepaid funeral and burial arrangements to be excluded from countable resources within limits. Converting cash value into a properly structured arrangement takes weeks and the contract becomes part of the application file.
• A life settlement. Runs 60 to 120 days from review to funding. That is why it belongs at the sixty-day mark at the latest and preferably earlier. Federal Government Accountability Office research (GAO-10-775) found sellers historically received roughly 10% to 35% of face value and several multiples of cash surrender value. Texas regulates these transactions through the Texas Department of Insurance.

Countdown Stage	The Work	Why It Cannot Wait
12 months out	Stop all gifts and ownership changes; see a Texas elder law attorney; begin a written asset inventory; document medical decline	The 60-month look-back reaches back from the filing date, and legitimate planning tools disappear as the date nears
6 months out	Total all income including royalties; compare to the institutional income cap; have a Qualified Income Trust drafted and the account opened	A Miller Trust generally cannot be applied retroactively; every delayed month is unpaid
90 days out	Request 5 years of statements for every account; assemble business documents, buy-sell agreements, entity-owned policies; confirm the power of attorney covers insurance	Banks take weeks; business valuations take longer
60 days out	Get written policy values and rider schedules; decide on paid-up election, funeral arrangement, surrender, or settlement	A settlement runs 60-120 days from review to funding
30 days out	Confirm Medicaid-certified bed capacity, written rate, care-level schedule; complete the clinical assessment	Midland County has only about 5-8 certified facilities as of 2026
Application week	File with an indexed packet and dated cover letter; include trust documents and funding proof; ask for a MEPD specialist	Texas allows a limited retroactive period; filing late forfeits it

Thirty Days Out: The Facility and the Bed

At thirty days, the question becomes physical: which building, and will they keep your parent when the money is gone.

Midland County’s certified inventory is thin. There are on the order of five to eight Medicare- and Medicaid-certified nursing facilities in the county as of 2026 — verify the current roster, ownership and inspection history on CMS Care Compare at medicare.gov/care-compare, because in a market this small one closure or ownership change moves the whole picture. Families routinely end up placing a parent in Odessa, in neighboring Ector County, or elsewhere in the Permian Basin.

Local pricing runs above the Texas median, which surprises people who expect West Texas to be cheap. As of 2026, plan on roughly $5,800 to $7,000 a month for a semi-private skilled nursing room in Midland County and about $7,000 to $8,400 for a private room, with assisted living around $4,300 to $5,400. The Texas statewide semi-private median has been running closer to $5,200 to $6,300. The reason is the oil economy: during boom cycles, nursing homes lose certified nursing assistants to oilfield-adjacent work paying far more, and wages plus agency staffing have to rise to compete. Housing costs move the same way. Confirm every figure directly with the facility.

Four questions to ask each facility, in writing:

1. Do you accept Texas Medicaid, and how many Medicaid-certified beds do you hold? Ask both parts. A facility can accept Medicaid and still have no certified bed available when private funds run out, which leads to involuntary transfer.
2. What is the current private-pay rate, and what has your annual increase been for each of the last three years?
3. What are the care levels, what triggers a move between them, and what does each cost? Level-of-care steps commonly add $300 to $900 a month permanently.
4. What is the wait, and what happens during it?

Also at thirty days: request the CARES-equivalent clinical assessment process through HHSC or the facility, and confirm the medical necessity documentation is in the file. A financially perfect application still fails without the clinical determination.

The Week of the Application

Applications are submitted online at YourTexasBenefits.com, by mail, or in person at an HHSC benefits office, including the office serving Midland County. Confirm the current location and hours before driving, since HHSC has consolidated offices repeatedly. Ask specifically for a MEPD specialist — Medicaid for the Elderly and People with Disabilities — because general benefits staff do not handle long-term care financial eligibility, and asking by name saves days.

Checklist for the week of filing:

• File as soon as the resident is in the facility and financially eligible. Texas allows a limited retroactive coverage period, so filing sooner rather than later can capture months already incurred. Ask the MEPD specialist how the retroactive period applies to your case.
• Submit a complete packet with an index and dated cover letter. When a caseworker says a document was never received, a dated index is what resolves it.
• Include the Qualified Income Trust document and the trust bank statements if income is over the cap, and confirm the first month’s funding has actually cleared.
• Include the designated representative form and the power of attorney if an adult child or attorney is handling the application.
• Attach a written explanation for every large transaction in the last five years, with supporting documentation. Volunteering an explanation is far better than answering a request for information later.
• Keep a copy of everything and a log of every phone call, with the date, the name, and what was said.

Then tell the facility’s business office that the application is filed and give them the case number. They deal with HHSC constantly, they have an obvious financial interest in your success, and they will often chase a caseworker faster than a family can.

After Filing: What Happens and What to Watch

Processing takes weeks to months, and three things can go wrong. Watch for each.

A request for information with a short deadline. The most common cause of denial is failure to furnish something on time. Check mail and the online portal constantly, and respond the same week. Most of these are documentary rather than substantive.

A resource denial. Usually a life insurance policy, a jointly titled account, an unspent tax refund, or an annuity nobody thought about. If the number named on the notice is small, the fix is usually mechanical.

A penalty period. If a transfer inside the look-back was identified, the notice states a number of months of ineligibility and a start date. Check the arithmetic yourself; the value used and the divisor can both be wrong. The cleanest cure is full return of the transferred asset, which generally allows the transfer to be treated as though it never occurred. Recognized exceptions exist for transfers to a spouse, to a disabled child, and certain caretaker-child transfers of a home. Federal law also requires states to maintain an undue hardship waiver process, and the nursing facility can often request one on the resident’s behalf with consent — ask the business office directly, in writing, whether they will.

Whatever the notice says, note the appeal deadline printed on it. Texas Medicaid fair hearings are decided by hearings officers in the HHSC Appeals Division, and service denials inside a STAR+PLUS managed care plan generally require exhausting the plan’s internal appeal first. File the written request to preserve the deadline and argue the merits second.

One thing to plan for at this stage rather than be surprised by: Texas estate recovery. The Medicaid Estate Recovery Program can assert a claim against the probate estate of a deceased long-term care recipient, though Texas publishes cost-effectiveness thresholds below which it does not pursue a claim and maintains a documented hardship waiver process with several recognized grounds. Verify current figures with HHSC, and note that hardship requests are time-limited after MERP’s notice. This is a conversation to have with a Texas elder law attorney about titling now, not with a grieving family later.

The Midland Wrinkle: Policies That Outlived Their Purpose

This county’s economy produces a specific and valuable fact pattern, and it is worth its own section because national Medicaid guidance never addresses it.

Permian Basin households include an unusual concentration of people who built, ran, or owned part of a privately held business. Those businesses bought life insurance for reasons that made sense at the time and frequently no longer apply:

• Key-person coverage. A policy the company bought on a founder or essential employee to protect against the financial loss of their death. When that person retires or the company changes hands, the purpose usually evaporates while the premiums continue. Our page on whether a key-person policy can be sold covers what is possible and who has to consent.
• Buy-sell funding. Policies bought so surviving owners could purchase a deceased owner’s interest. If the agreement was superseded, the company was sold, or the other owners are gone, the coverage may be orphaned.
• Company-owned life insurance. Policies a business holds on executives, sometimes carried on the books for decades after the executives left. When the business is sold or dissolved, someone has to decide what happens to them, and often nobody does. Our page on company-owned policies after a business is sold walks through that situation.

Why this matters at exactly this moment. A policy the company owns is generally a company asset rather than the applicant’s countable resource — but the applicant’s ownership interest in the company is an asset, and how the policy is valued inside it will be examined. Meanwhile a policy the applicant personally owns on their own life is squarely a countable-resource question under the aggregation rule. Establishing which is which, with documentation, is the work of the ninety-day and sixty-day stages.

And there is real value at stake. These are often large-face-amount permanent policies on an insured who is now elderly with declining health — which is precisely the profile where the secondary market pays the most relative to surrender value. Untangling ownership, obtaining any required consents from the entity or other owners, and completing a transaction takes time. Started at twelve months, it is manageable. Started at thirty days, it is not.

When Selling Is the Wrong Answer, and Where to Call

Be as clear about the cases against selling as the cases for it.

Selling is the wrong move when the face amount is small: below roughly $100,000 of death benefit the secondary market is generally not interested, so a small burial or lodge policy is a keep, funeral-trust, or surrender question rather than a sale. It is wrong when the policy already sits inside the burial exclusion, because a sale converts an excluded asset into countable cash and creates the very problem you are solving. It is wrong when the insured is in good health for their age, since offers turn on life expectancy. It is wrong when a surviving spouse needs the death benefit — Texas’s community spouse resource allowance is a separate calculation that should be run before anyone gives up coverage. It is wrong for unconverted group coverage, which is generally not salable. And it is wrong on timing when money is needed inside 60 days, because settlements run 60 to 120 days from review to funding.

Now the contacts, all free:

• Texas Health and Human Services Commission, for the application, through YourTexasBenefits.com or the benefits office serving Midland County. Ask for a MEPD specialist.
• Permian Basin Area Agency on Aging, operating through the Permian Basin Regional Planning Commission in Midland, for free options counseling covering Midland, Ector and the surrounding counties. This is the right first call and almost nobody makes it.
• HICAP — the Health Information, Counseling and Advocacy Program, Texas’s State Health Insurance Assistance Program, delivered through that aging network — for free Medicare counseling, including help reading a Notice of Medicare Non-Coverage.
• Texas Department of Insurance, for questions about a carrier, a lost policy, a denied long-term care claim, or life settlement licensing.
• A Texas elder law attorney, for the Qualified Income Trust, spousal protections, business-interest questions, and estate recovery planning. This is the one that is not free and the one most likely to pay for itself several times over.
• The long-term care ombudsman program serving the region, for resident rights and facility quality concerns.

A free policy review fits at the sixty-day stage and needs only a policy cover page. It will tell you what each contract is actually worth, including the answer that the right move is to leave it alone.

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Frequently Asked Questions

When should we start planning for Medicaid in Midland County?

Twelve months before care is needed, if you have that much warning. Texas reviews every asset transfer made in the 60 months before an application, so the earliest work is simply stopping gifts and ownership changes and getting an attorney’s view while legitimate planning options still exist. Six weeks out, most of those options are gone.

What is a Qualified Income Trust and when do we need one?

Texas applies a hard institutional income cap, historically 300% of the federal SSI benefit rate and indexed annually. If countable monthly income exceeds it, a Qualified Income Trust, or Miller Trust, must be drafted, given its own bank account, and funded every single month. It generally cannot be applied retroactively, so have it ready before you file.

How much does a nursing home cost in Midland County?

As of 2026, plan on roughly $5,800 to $7,000 a month for a semi-private skilled nursing room and $7,000 to $8,400 for a private room, with assisted living around $4,300 to $5,400. That runs above the Texas median of roughly $5,200 to $6,300, because oilfield wage competition raises staffing costs during boom cycles.

Do mineral or royalty interests count for Medicaid?

Royalty income counts as income and the underlying interest is an asset, and both matter. Values fluctuate with commodity prices and the interests are often held through partnerships or trusts, which complicates documentation. Get them appraised and documented at the ninety-day stage rather than scrambling when the caseworker asks.

What happens to a key-person or buy-sell life insurance policy?

It depends on who owns it. A policy the company owns is generally a company asset rather than the applicant’s countable resource, though the applicant’s ownership interest in the company is itself an asset and the policy’s value inside it will be examined. Document ownership and beneficiary designations early, and obtain any required entity or co-owner consents.

Why did a small policy cause a resource problem?

Because Texas starts from total face value across all permanent policies on the same insured, not each policy separately. If the combined death benefit exceeds the small burial exclusion threshold, the exclusion is generally lost and the policies’ cash surrender value becomes countable. Term coverage with no cash value is generally not counted at all.

Where do we file and who can help for free in Midland?

File at YourTexasBenefits.com, by mail, or at the HHSC benefits office serving Midland County, and ask specifically for a MEPD specialist. The Permian Basin Area Agency on Aging, through the Permian Basin Regional Planning Commission in Midland, offers free options counseling, and HICAP provides free Medicare counseling through that same network.

Related Reading

• Nursing Home Costs Midland County Tx
• Sell Life Insurance Policy Midland County Tx
• Texas Medicaid Asset Income Limits
• Nursing Home Medicaid Spend Down
• Life Insurance Counts Medicaid Asset
• Can I Sell A Key Man Life Insurance Policy
• Business Sold Coli Policies
• Sell Life Insurance Policy Bell County Tx

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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.