Myth: I Make Too Much Money to Qualify for Medicaid

When families begin exploring options to pay for long-term care, one of the first things they often say is: “We’d never qualify for Medicaid—we make too much money.” Many times, they have even been told that by a nursing home or trusted senior advisor. The truth is that when it comes to nursing home Medicaid in Texas, that’s not true. Let’s clear up the confusion and explain how income works in Medicaid eligibility—and why you should always speak with an elder law attorney before assuming you're ineligible.

The Medicaid Income Cap

For 2025, the income limit for nursing home Medicaid in Texas is $2,901/month in gross monthly income for the person applying (this includes Social Security and other income before deductions). If the applicant’s gross income is over that cap, it’s true that they can’t qualify without an additional step. That step is creating a Miller Trust (also known as a Qualified Income Trust).

The Miller Trust: Your Medicaid Income Workaround

If your income exceeds the cap—even by one penny—you’ll need a Miller Trust (also called a Qualified Income Trust) to qualify for Medicaid. This trust holds your income and funnels it through a special structure that satisfies Medicaid rules. Using a Miller Trust, even people with significantly more than $2,901 a month in income can qualify for Medicaid.

What If You’re Married?

We often see confusion when married couples are involved, especially from nursing homes that misapply the income cap. The $2,901 per month income limit only applies to the applicant. There is an income cap for married couples ($5,802 per month in 2025), but that only applies if both spouses are applying for Medicaid at the same time (which is rare). If only one spouse is applying, the non-applicant spouse’s income is not counted for eligibility. In fact, the spouse at home—called the community spouse—gets special protections.

The Spousal Diversion

Texas Medicaid rules ensure that the spouse who stays at home is not impoverished. The community spouse keeps 100% of their own income, no matter how much they make and may even receive some of the applicant’s income to meet minimum needs. This is called a spousal diversion, and it ensures that one spouse going into a nursing home doesn’t financially ruin the other.

What About the Co-Payment?

Once you qualify for Medicaid, you don’t keep all of your income. Most of it goes toward your nursing home co-payment, which helps cover the cost of your care. Medicaid pays the rest. This is why the idea that you “make too much to qualify” is a myth. What’s really true is that you may qualify, even with high income, using a Miller Trust, but depending on your co-payment, Medicaid may not always save you money, especially if your income is high and your nursing home costs are low. This is why every case must be analyzed individually.

Medicaid rules are complex and often misunderstood—even by nursing homes and social workers. Before you assume you’re ineligible or pass up important benefits, speak with an elder law attorney who understands income limits, Miller Trusts, and spousal protections.