Understanding Medicaid Income Limits in Texas

When applying for Medicaid, one of the most important factors to consider is the income limit. In Texas, as well as in 12 other states, there is a strict income threshold that applicants must meet to qualify for Medicaid benefits. This article will help you understand these limits and what options are available if income exceeds the allowed amount.

Texas Medicaid Income Limit

As of January 1, 2018, the individual income limit for Medicaid in Texas is $2,205 per month. If an individual earns more than this amount, they will be disqualified from Medicaid benefits unless they set up a Qualified Income Trust (QIT), also known as a Miller Trust.

How Marital Status Affects Medicaid Eligibility

The income limit rule varies depending on marital status and other financial circumstances. The “Name on the Check” Rule is used to determine eligibility, meaning the government considers whose name the income is paid to when assessing Medicaid eligibility. If both spouses receive income, income-shifting strategies may be available to protect assets and maintain Medicaid eligibility.

Why a Qualified Income Trust (Miller Trust) Is Essential

If your income exceeds the limit, a Qualified Income Trust (QIT) can be used to legally redirect excess income, allowing Medicaid qualification. Many families underestimate their loved one’s total income, leading to unexpected disqualification. If a Medicaid applicant receives around $1,500 per month or more, it is advisable to consult with an elder law attorney to establish a Miller Trust and avoid Medicaid denial.

Key Considerations for Medicaid Income Calculations

It’s important to understand that income is assessed before deductions. This means that Social Security withholding, Medicare supplemental insurance premiums, and tax withholdings are not subtracted when determining eligibility. Common income sources that may affect Medicaid qualification include:

• Social Security Benefits – Always refer to the official Social Security statement to determine gross income.

• Annuities – Certain annuity payments may be considered income under Medicaid rules.

• Interest Payments – Monthly payments from investments or savings accounts may count as income.

Next Steps: Planning for Medicaid Eligibility

To ensure Medicaid eligibility and avoid common pitfalls, it’s crucial to:

• Understand income limits and eligibility rules.

• Consider setting up a Qualified Income Trust (Miller Trust).

• Consult an elder law attorney for Medicaid planning strategies.

Navigating Medicaid income rules can be complex, but with the right approach, you can secure benefits while protecting your financial future.