His Social Security Deposit Will Be $2,808. Medicaid Will Count the $3,011 Before Medicare Takes Its Premium, and That Will Put Him $29 Over the Nursing Home Income Limit

Picture a retired Texan at the kitchen table with his banking app open. He’s a composite of the families elder law attorneys see all the time. His Social Security deposit is about $2,808 a month. His daughter has read that Texas caps nursing home Medicaid income at $2,982 a month in 2026. They decide he’s safely under and file the application.

Texas does the math differently. Medicaid counts his gross Social Security benefit of $3,011, the amount before Medicare takes its premium. That puts him $29 over the line. For nursing home coverage, Texas uses a hard income cap with no deductions for medical expenses, so even a small excess closes the door.

Why Medicaid Sees $3,011 When His Bank Shows $2,808

Families mix up the two programs all the time, so they’re worth sorting out first. Medicare has covered his health care since he turned 65. It pays for doctors, hospital stays and short rehab stays in a nursing facility. Medicaid, funded by both Washington and the states, pays for long-term nursing home care for people with limited income and assets. Texas runs its own version and writes its own income rules.

In 2026, the standard Medicare Part B premium is $202.90 a month. Social Security takes that premium out before the money reaches his checking account. That’s why his bank shows $2,808.

Medicaid tests eligibility on the bigger number. The state’s own eligibility handbook describes the nursing facility limit as a maximum gross monthly income. Gross means the full benefit Social Security awards him, including the dollars Medicare takes first. Those dollars belong to him on paper, so they count as his income even though he never sees them.

The 2026 cap is set at 300% of the federal Supplemental Security Income benefit rate, which is $994 a month for an individual this year. Both figures reset every January.

A Qualified Income Trust Fixes the $29 Problem

For applicants who meet every other requirement but have too much gross income, Texas offers a way around the cap: the Qualified Income Trust. People often call it a QIT or a Miller trust. The state handbook defines it as an irrevocable trust funded only with the applicant’s own income.

Here’s how it works. A trustee, often an adult child, opens a separate bank account for the trust. Each month, income goes into that account. Texas lets the trust cover any of his income sources, but the entire income source must be deposited. He could put his whole pension in the trust and leave Social Security out. He couldn’t put in half the pension. The money also has to go in during the same month he gets it.

Income that flows through a properly run trust no longer counts against the cap. The money still has a job, though. It goes toward his monthly share of the nursing home bill. When he dies, the state takes whatever is left in the trust, up to the amount Medicaid paid on his behalf. Some families flinch at that clause, but every valid QIT must include it.

Two mistakes cause most of the trouble. If savings go into the trust, it can lose its status as a valid QIT, because the account can hold only his income. And if an income source covered by the trust doesn’t get deposited that month, that income becomes countable again and can knock him over the cap.

Paperwork That Decides a Texas Nursing Home Application

Families who get approved without a fight usually gather the documents before they fill out a single form:

• The current Social Security benefit letter, which shows the gross benefit before Medicare takes anything
• Medicare premium information, including any Part D or supplemental premiums taken out of the check
• Pension statements showing the gross payment, before tax withholding
• Several months of bank records for every account

The benefit letter matters most. It shows the number the caseworker will use. If his gross income from all sources tops $2,982, the trust has to be valid and properly funded for any month the family wants Medicaid coverage. Families often use an elder law attorney to draft it, because a bad document or a missed deposit can put that month’s eligibility at risk.

Every January Raise Moves the Line

Social Security announced its 2027 inflation adjustment on Wednesday. His gross benefit goes up in January, and so does the SSI rate that sets the cap. The 2027 Texas limit hasn’t been published yet, so families close to the line check their gross numbers again each January instead of assuming last year’s answer still holds.

His story turns on money he never gets to spend. The bank shows $2,808, while the caseworker sees $3,011. If his family sets up and funds a Qualified Income Trust before filing, that $29 stops blocking his coverage for long-term care.

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