Medicaid Spend-Down in Temple, Texas (2026)

Who Decides, and the Interest List You Should Get On Today

HHSC determines financial eligibility under the Medicaid for the Elderly and People with Disabilities program, with applications submitted through YourTexasBenefits or at an HHSC benefits office; HHSC maintains offices in the Temple and Belton area, and you should confirm the current location and whether an appointment is required before driving anywhere. Belton is the Bell County seat. Once eligible, services are delivered through a STAR+PLUS managed care organization.

The Area Agency on Aging serving Bell County is the Central Texas Area Agency on Aging, part of the Central Texas Council of Governments, based in Belton. That office is the right first call for benefits counseling, caregiver support, the long-term-care ombudsman, and the state’s federal State Health Insurance Assistance Program services — in Texas, the Health Information, Counseling and Advocacy Program, administered by HHSC through the area agencies. It is free. For the life insurance contract itself, and to verify that any party in a settlement transaction is licensed, the regulator is the Texas Department of Insurance.

Then the single most time-sensitive item in this entire guide. Texas’s home and community based waiver services under STAR+PLUS operate from an interest list, and that list in Texas has historically run for years rather than months. Nursing facility Medicaid has no such list — the institutional door is open, and the community door has a line. If there is any chance a parent will want care at home or in an assisted living setting rather than a nursing home, get on the interest list today. It costs nothing, commits you to nothing, requires no financial documentation, and cannot be accelerated later.

Line One: The Homestead, Which Texas Protects Fiercely

Texas’s homestead exemption is the strongest in the country. Under Texas law the homestead is protected from most creditors without regard to its value, subject to acreage limits that distinguish urban from rural property. Families in Bell County generally know this, and it is why the instinct here is different from the instinct in Pennsylvania or Massachusetts: Texans tend to assume the house is untouchable.

For Medicaid eligibility, the residence is generally excluded while the applicant lives there, states an intent to return, or while a spouse or a dependent, blind, or disabled child lawfully resides in it. So far, so consistent with the Texas instinct.

Here is the part that surprises people. The Texas homestead exemption is a creditor-protection rule under state law. It does not override the federal Medicaid home equity limit, which caps how much home equity a long-term-care applicant may hold and still have the residence treated as non-countable. That federal floor figure has been in the neighborhood of $730,000 to $750,000 in recent years and is indexed annually; confirm the 2026 Texas figure with HHSC. In Temple, where median home values run in the rough range of $250,000 to $290,000 as of 2026, the ceiling is rarely the binding constraint — but on a large rural Bell County tract or a family ranch it can be, and the acreage rules that make Texas homestead protection generous do not carry over into Medicaid counting. Verify property values with the Bell County Appraisal District rather than a real estate site.

What not to do is deed the house to the children. It is a transfer for less than fair market value that produces months of ineligibility, it typically destroys the stepped-up basis heirs would have received, and it hands away Texas’s own homestead protection in the process. Legitimate Texas planning structures exist and all of them are attorney work.

Line Two: The Income Cap, Which Is the Real Gate in Texas

Most families walk in worried about assets and get stopped by income. Texas enforces a hard monthly income cap for institutional Medicaid eligibility, set at 300% of the federal SSI benefit rate — roughly $3,000 a month as of 2026, a figure that changes annually and must be confirmed with HHSC. Texas is not a medically needy state, so there is no option to spend excess income down on medical bills the way North Carolina or Maryland allows.

The Texas answer is a Qualified Income Trust, commonly called a Miller Trust. Income above the cap is deposited into the trust in the month it is received, the trust pays the applicant’s cost of care and permitted expenses, and the deposited income is not counted against the cap. It is mandatory, not optional, for a household over the limit.

Three ways families get this wrong. They set it up late, and the month of coverage fails even though the underlying situation qualifies. They fund it with the wrong money or in the wrong month, since the trust must receive the income itself rather than a transfer from savings. Or they draft it from a template and it fails to include the required provisions, including naming the state as remainder beneficiary. Have a Texas elder law attorney draft and set up the trust — it is modest work that prevents a total denial.

Once eligible, the resident owes a co-payment toward the cost of care: nearly all monthly income goes to the facility, with only a small personal needs allowance retained plus health insurance premiums and, for a married couple, a spousal allowance. Ask HHSC for the current personal needs allowance figure in writing.

Line Three: Cash, Accounts, and the One-Vehicle Rule

Checking, savings, money market accounts, certificates of deposit, cash, and taxable brokerage holdings are countable at value with no exemption. This is the column that must come down to roughly $2,000 for an unmarried applicant.

Texas has one meaningful advantage in liquidating it: there is no state income tax, so selling appreciated securities or taking IRA distributions to pay for care triggers only federal tax, not a state layer on top. That still matters — a large distribution in a single year can raise Medicare premium surcharges two years later — so spreading liquidations across tax years remains worthwhile. Talk to your CPA before the first sale.

One vehicle is generally excluded when it is used for the transportation of the applicant or a household member, without regard to value. A second vehicle is countable at fair market value, and in Bell County, where a household commonly runs a truck and a car, this is a real line item. A vehicle signed over to a grandchild during the look-back is a transfer at fair market value, not a gift of nothing because no cash changed hands — pull the title history before filing.

Joint accounts remain the classic trap. Texas, like most states, generally treats funds the applicant can withdraw as available to the applicant in full, whatever the source of the deposits. A daughter added to her mother’s account for convenience has created a pool presumed to be the mother’s until deposit records prove otherwise, and unwinding it later looks like a transfer. Household goods and personal effects are generally excluded; property held as an investment is not.

Balance Sheet Line	General Texas Treatment	Temple / Bell County Note
Countable asset limit, single (2026, verify)	Roughly $2,000	Assets are rarely the item that stops a case here
Monthly income cap, institutional (2026, verify)	About $3,000 – 300% of the SSI benefit rate	Texas is not medically needy; excess income needs a Miller Trust
Homestead	Excluded during life; Texas creditor protection is unlimited by value	The federal Medicaid home equity limit still applies
One vehicle	Generally excluded	A truck plus a car means the second one counts
Checking, savings, brokerage	Countable at value	No state income tax on liquidation
Mineral and royalty interests	Countable; producing interests also generate income	Common in Central Texas and routinely forgotten
Deferred annuity	Countable at surrender value	Immediate annuity income counts against the income cap
Irrevocable funeral arrangement	Generally excluded	Cheapest legitimate spend-down available
Life insurance	Cash value counts if total face value exceeds the small-policy threshold	A VGLI or group term certificate can trigger the aggregation
Estate recovery	Probate estate only, with value thresholds and hardship waivers	No Texas estate or inheritance tax
STAR+PLUS home and community based waiver	Interest list, historically years long	Nursing facility Medicaid has no list – get on the interest list today
Killeen-Temple semi-private nursing room	~$5,000-$6,000/month (2026 range)	At or below the Texas median
Temple assisted living	~$3,800-$4,500/month (2026 range)	Below the Texas median

Line Four: Retirement Accounts, Annuities, and Mineral Interests

Whether an IRA or a 401(k) counts as an available resource or is instead treated as an income stream depends on accessibility and distribution status, and the treatment varies. Get HHSC’s position in writing rather than relying on what a relative experienced in another state; the difference can be tens of thousands of dollars.

Annuities split two ways. A deferred annuity with an accessible surrender value is generally countable at that value. An immediate annuity can convert countable savings into a non-countable income stream, but only if it satisfies strict federal requirements — irrevocable, non-assignable, actuarially sound, level payments, with the state named as remainder beneficiary in the required position. An annuity purchased without those features is a penalized transfer with a glossy brochure, and products are marketed to families in exactly this situation constantly. Remember also that annuity income counts against the Texas income cap, so an annuity strategy that solves an asset problem can create an income problem requiring a Miller Trust.

Then a Texas line item that does not exist in most states: mineral and royalty interests. A great many Central Texas families hold fractional mineral interests inherited across generations, sometimes producing a few dollars a month, sometimes nothing at all. A producing interest generates countable income and has a valuation; a non-producing interest still has to be identified, valued, and reported. These take months to sort out and they are frequently forgotten entirely. Find them before HHSC does, and expect to need a landman or an attorney to value them.

Line Five: Burial Arrangements, and Texas’s Restrained Estate Recovery

A designated burial fund is excluded up to a modest limit, and separately an irrevocable prepaid funeral or burial contract is generally excluded, provided it is genuinely irrevocable and within what Texas permits. Burial space items — a plot, a vault, a marker, opening and closing costs — are typically excluded in addition. Revocable prepaid plans generally remain countable, so get a written statement from the funeral home that the contract is irrevocable, and ask HHSC for Texas’s current limits.

This is the cheapest legitimate move on the board. Funding an irrevocable arrangement is spending on the applicant, not giving money away, so it reduces countable assets, creates no transfer penalty, and eliminates an expense the family would otherwise pay in cash at the worst possible moment.

On the back end, Texas is comparatively gentle. The Medicaid Estate Recovery Program reaches only the probate estate, and it operates with value thresholds — small estates and small recoverable amounts are not pursued — along with hardship waiver provisions. Texas also has no state estate or inheritance tax. Confirm the current thresholds and hardship rules with HHSC, and note that how property passes matters: assets that transfer outside probate are generally outside the program’s reach. That difference is why a Texas family’s keep-versus-sell decision on a home looks different from a Pennsylvania family’s, and it is a question for a Texas elder law attorney rather than a website.

Line Six: The Life Insurance Policy

Life insurance is counted through the face-value aggregation rule. Texas, like most states, adds together the total face value of every policy the applicant owns; if the combined face value sits at or under the small-policy threshold — historically $1,500 of total face value nationally, a figure to confirm for Texas as of 2026 — every policy is disregarded. Exceed the threshold by a dollar and the cash surrender value of each permanent policy becomes countable against the roughly $2,000 limit.

Two consequences catch families out. Term insurance normally has no cash surrender value and so counts as nothing itself, but its face amount still counts toward the aggregation test that decides whether permanent policies count — so a Servicemembers’ or Veterans’ Group Life certificate, or a group term policy from a former employer, can flip a small paid-up whole life contract from fully exempt into fully countable. And the threshold applies to combined face value, so a household holding three small burial policies is almost certainly over it. Our full treatment is at how life insurance counts as a Medicaid asset.

Four options for a countable policy. Keep it, if a beneficiary genuinely needs the benefit and the premium is sustainable. Elect reduced paid-up coverage, ending premiums while keeping a smaller guaranteed death benefit with no new underwriting. Irrevocably assign a small policy to a funeral provider or fund an irrevocable funeral arrangement — spending on the applicant, so no penalty. Or have the contract reviewed for secondary-market value: the federal GAO study of the market (GAO-10-775) found sellers typically received roughly 10% to 35% of face value and several multiples of cash surrender value. A sale at fair market value is not a transfer and creates no penalty, though the proceeds are countable cash that must be spent down legitimately, and any resulting income counts against the Texas income cap in the month received.

When selling is the wrong answer: face amounts under roughly $100,000 rarely draw an offer at all; a policy already irrevocably assigned to burial is already exempt and selling it converts an exempt asset into countable cash; an insured in good health for their age will not attract meaningful pricing because offers track life expectancy; and if a surviving spouse in Temple will lose a pension or survivor benefit at the first death, the death benefit may be the household plan, and community spouse resource rules often allow the couple to keep the policy legitimately.

The Bell County Line Item: VA Benefits Before Medicaid

This section exists because of where Temple is. Bell County is a military community — Fort Cavazos sits in neighboring Killeen, and Temple hosts a large Department of Veterans Affairs medical center. A very large share of older households here include a wartime veteran or a surviving spouse of one, and for those households the VA is frequently a better first door than Medicaid.

Two VA benefits matter. Aid and Attendance is an increased monthly pension for a wartime veteran or surviving spouse who needs the aid of another person with daily activities, and the Housebound allowance is a related increase. Both are income-based pensions with a net worth limit, and they can be used to pay for in-home care, assisted living, or nursing facility care — often filling exactly the gap that would otherwise force a household into a spend-down. Neither is a substitute for Medicaid in every case, and the amounts change annually.

Two cautions. First, the VA imposed its own look-back on asset transfers, generally 36 months, effective in 2018, alongside a net worth limit — so the same gift can create a penalty under both systems on different clocks, and a transfer made to qualify for one can disqualify from the other. Second, no one should pay a fee to have a VA benefits application prepared; accredited representatives and veterans service organizations assist at no charge, and Bell County has a county veterans service office. Ask the Central Texas Area Agency on Aging for a referral.

Also ask about the Texas State Veterans Homes, administered by the Texas Veterans Land Board, which include a location in Bell County. These are skilled nursing facilities where VA per-diem support for eligible veterans can bring the out-of-pocket cost well below a private facility’s rate. Availability is limited and eligibility rules are specific, so call early.

What Care Costs in Temple, and the Order to Work In

Texas is among the least expensive states in the country for long-term care, and the Killeen-Temple market is inexpensive even by Texas standards. Cost-of-care survey ranges of the Genworth type place the Texas median semi-private skilled nursing room in the rough range of $5,500 to $6,500 a month as of 2026, with private rooms commonly $6,500 to $7,800. The Killeen-Temple metro generally prices at or below the state median — a working range of roughly $5,000 to $6,000 for a semi-private room. Assisted living in Temple runs roughly $3,800 to $4,500 a month for a one-bedroom unit against a Texas median closer to $4,200 to $4,800, with memory care higher.

These are survey ranges. Get each facility’s written private-pay rate, its rate history for the last three years, and its answers on Medicaid certification and on whether it retains residents who convert from private pay. Temple has an unusual advantage for a city of roughly 90,000: because it functions as the regional medical hub for Central Texas, with a major hospital system’s flagship campus and a VA medical center in the city, post-acute and skilled nursing capacity here is far deeper than the population would suggest, and families genuinely have choice. Choice is leverage. For the runway arithmetic, see nursing home costs in Temple.

Because rates here are low, the runway math is friendlier than in most of this country. A household with $200,000 of accessible assets and $3,000 a month of income facing a $5,500 monthly bill has a gap of $2,500 a month and roughly eighty months of runway — nearly seven years. That is seven years in which planning is possible, which is exactly the argument for doing it now rather than at admission.

Work in this order. Get on the STAR+PLUS interest list today. Total monthly income and find out whether a Miller Trust is required, then have one drafted. Sort assets into countable and exempt and pull 60 months of statements on every account, including closed ones, listing every transfer. Identify mineral interests and any second property early. Get carrier letters stating cash surrender value for every permanent policy, allowing three to six weeks. Investigate VA Aid and Attendance and the State Veterans Homes through free accredited channels. Then, with a Texas elder law attorney, decide what to spend, restructure, or sell. If the policy question is what brought you here, life settlements in Temple covers it, and for a free, no-obligation review you can send the cover page and current premium notice or call (305) 209-7183.

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Frequently Asked Questions

Which county is Temple in, and where do I apply?

Temple is in Bell County, whose seat is Belton, but the county has no role in eligibility. Texas Health and Human Services Commission determines Medicaid eligibility for the elderly and people with disabilities centrally, with applications through YourTexasBenefits or an HHSC benefits office. Confirm the current Temple-area office location before traveling.

What is a Miller Trust and is it required in Texas?

Texas enforces a hard monthly income cap for institutional Medicaid, roughly $3,000 as of 2026, and is not a medically needy state, so excess income cannot simply be spent on medical bills. Income above the cap must be deposited into a Qualified Income Trust, commonly called a Miller Trust, in the month received. Have an attorney draft it.

Does Texas’s homestead exemption protect the house from Medicaid?

It protects the homestead from most creditors without regard to value, but it does not override the federal Medicaid home equity limit that applies to long-term-care eligibility. In Temple, where median values are moderate, the limit is rarely binding, but on a large rural tract it can be. Confirm the 2026 figure with HHSC.

How long is the STAR+PLUS waiver waiting list?

Texas’s interest list for home and community based waiver services has historically run for years rather than months. Nursing facility Medicaid has no such list. If there is any chance a parent will want care at home or in assisted living, get on the interest list immediately: it is free, requires no financial documents, and cannot be accelerated later.

Should a veteran family apply for VA benefits instead of Medicaid?

Often it is worth trying first. Aid and Attendance and the Housebound allowance increase a wartime veteran’s or surviving spouse’s pension to help pay for care. Note the VA has its own transfer look-back, generally 36 months, and a net worth limit, so the two systems can conflict. Use free accredited help; never pay a fee for application preparation.

What does a nursing home cost in Temple, Texas?

As of 2026, survey ranges put a Killeen-Temple semi-private skilled nursing room at roughly $5,000 to $6,000 a month, at or below the Texas median of about $5,500 to $6,500, with assisted living around $3,800 to $4,500. Temple has unusually deep post-acute capacity for its size because it is the regional medical hub. Get each facility’s written rate.

Related Reading

• Nursing Home Costs Temple Tx
• Life Settlements Temple Tx
• Texas Medicaid Asset Income Limits
• Life Settlement Licensing Texas
• Life Settlement Taxes Texas
• Sell Life Insurance Policy Bell County Tx
• Sell Life Insurance Policy Brazos County Tx
• Nursing Home Medicaid Spend Down
• Life Insurance Counts Medicaid Asset

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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.