Editorial Team · Content Writer
Reviewed by John Brown, CSA®
Updated October 2026 · 14-minute read

When an older parent leaves a Central Texas hospital or rehabilitation facility, families often face two urgent questions at once: What care is needed, and how will we pay for it?

The answer is rarely one program or insurance policy. A family may use Medicare for short-term skilled care, personal savings for assisted living, an existing long-term care insurance policy for eligible services, and Medicaid or VA benefits if the older adult qualifies. What pays depends on the care setting, medical and functional needs, financial eligibility, existing coverage and how long support is expected to continue.

Short answer: Most long-term care is paid through a combination of personal income and savings, long-term care insurance or life-insurance benefits, Medicaid long-term services and supports, and eligible VA benefits. Medicare may cover qualifying skilled nursing, home health or hospice services, but it generally does not pay for ongoing custodial care in the home, assisted living, memory care or a nursing facility.

Table of Contents

• Understanding the Main Ways to Pay for Long-Term Care
• What Medicare Actually Covers
• Texas Medicaid Long-Term Care and STAR+PLUS
• Long-Term Care Insurance and Life Insurance
• VA Aid and Attendance Benefits
• Private Pay, Home Equity and Family Contributions
• A Step-by-Step Central Texas Funding Plan
• Frequently Asked Questions

Understanding the Main Ways to Pay for Long-Term Care

Long-term care includes ongoing assistance with activities such as bathing, dressing, toileting, eating, medication support and supervision. It may be provided at home, through adult day services, in assisted living or memory care, or in a nursing facility.

Families commonly combine several funding sources:

1. Personal income and savings: Social Security, pensions, retirement withdrawals, investment income and savings.
2. Long-term care insurance: Benefits from a policy purchased before care was needed, subject to its triggers, limits and covered settings.
3. Life-insurance options: Accelerated benefits, qualified riders, loans, surrender or a regulated life settlement, depending on the policy and professional review.
4. Texas Medicaid: Nursing-facility benefits or approved home- and community-based services for people who meet financial, functional and program requirements.
5. VA benefits: Pension-based Aid and Attendance or Housebound benefits for qualifying Veterans and survivors.
6. Medicare: Limited coverage for qualifying skilled nursing, home health and hospice—not general long-term custodial care.
7. Home equity or family assistance: Sale proceeds, carefully evaluated lending options or shared family contributions.

The Texas Department of Insurance long-term care guide identifies personal funds, Medicaid, Medicare, life-insurance or annuity benefits, and long-term care insurance as possible payment sources.

Before moving money or changing ownership of an asset, consider whether Medicaid may be needed within the next five years. Texas Medicaid reviews certain transfers during a 60-month look-back period, and transfers for less than fair market value may cause a penalty. A Texas elder-law attorney should review asset transfers, trusts, gifts and significant financial changes before they occur.

What Medicare Actually Covers

Medicare is health insurance—not comprehensive long-term care coverage. It may pay for medically necessary skilled services when the coverage requirements are met, but it generally does not pay for extended help with activities of daily living when that is the only care needed. Medicare's long-term care guidance states that beneficiaries pay the full cost of most noncovered long-term care.

Skilled nursing facility care

Original Medicare Part A may cover up to 100 days of skilled nursing facility care in a benefit period, but 100 days are not guaranteed. Coverage continues only while all Medicare requirements are met, including a need for daily skilled nursing or therapy in a Medicare-certified facility.

For Original Medicare, the usual requirements include:

• a medically necessary inpatient hospital stay of at least three consecutive days, excluding the discharge day;
• admission to the skilled nursing facility generally within 30 days after leaving the hospital;
• remaining Part A days in the benefit period; and
• a continuing need for qualifying daily skilled care.

Hospital observation time and emergency-room time do not count toward the usual three-day inpatient requirement. However, certain Medicare Advantage plans and approved programs may waive that rule. Families should confirm coverage with the plan and hospital discharge team rather than assuming the stay qualifies.

According to Medicare's 2026 skilled nursing facility coverage, Original Medicare beneficiaries generally pay:

• Days 1–20: $0 per day after the applicable Part A deductible;
• Days 21–100: $217 per day; and
• Day 101 and beyond: all costs.

Medicare Advantage costs and rules may differ. A facility can also end Medicare billing before day 100 when skilled criteria are no longer met.

Medicare home health

Medicare may cover part-time or intermittent skilled nursing, therapy and certain other services when the beneficiary is homebound, a qualified practitioner orders the care, and a Medicare-certified home health agency provides it.

A home health aide may be covered only when the beneficiary is also receiving qualifying skilled nursing or therapy. Medicare does not pay for:

• 24-hour care at home;
• meal delivery;
• homemaker services unrelated to the care plan; or
• personal or custodial care when that is the only care needed.

Review the full requirements on Medicare's home health coverage page.

Medicare hospice

Medicare may cover hospice when the required clinicians certify that the person is terminally ill with a life expectancy of six months or less if the illness follows its usual course, and the person elects comfort-focused hospice care for the terminal illness.

Hospice can continue beyond six months when eligibility is recertified. However, Medicare generally does not pay room and board in assisted living, a nursing facility or the person's home. See Medicare hospice coverage for the complete rules.

Texas Medicaid Long-Term Care and STAR+PLUS

Texas Medicaid can pay for nursing-facility care and certain home- and community-based long-term services for eligible people. Approval is not based on age alone. HHSC considers financial eligibility, medical necessity, functional need, residency and the requirements of the specific program.

2026 Texas income and resource figures

For 2026, Texas HHSC lists the following maximums for Medicaid nursing-facility and applicable home- and community-based waiver eligibility:

• Maximum gross monthly income: $2,982 for an individual and $5,964 for a couple.
• Maximum countable resources: $2,000 for an individual and $3,000 for a couple.

These figures do not tell the entire story. Ownership, accessibility, marital status, spousal protections, home equity, burial arrangements, trusts and other exclusions can change the calculation. Current figures and explanations are available in Texas HHSC Appendix XII.

A person whose income exceeds the stated limit should not assume Medicaid is impossible. Texas recognizes properly established Qualified Income Trusts, sometimes called Miller Trusts, for certain institutional and waiver applicants. These irrevocable trusts must meet detailed requirements, contain only qualifying income and undergo appropriate legal review. Families should consult a Texas elder-law attorney rather than trying to create or operate one from an online template.

Does Texas Medicaid pay for assisted living?

Texas Medicaid does not simply pay every assisted-living bill. The STAR+PLUS Home and Community Based Services program may cover approved services in assisted living for eligible members who would otherwise need nursing-facility care.

The resident remains responsible for required room-and-board charges. Texas HHSC specifically states that STAR+PLUS HCBS room and board cannot be waived. Availability, assessment, program eligibility and facility participation also matter.

Before choosing a community based on expected Medicaid coverage, confirm:

• whether the person has been approved for the appropriate Medicaid program;
• whether the community participates in that program;
• which care services Medicaid will cover;
• the resident's required room-and-board payment;
• what services or supplies remain private-pay; and
• whether there is a waiting or enrollment process.

Spend-down and the five-year look-back

“Spending down” does not mean giving money away. It generally means using countable assets for the older adult's legitimate needs, which may include care, medical expenses, housing, debt or other permitted purchases.

Texas uses a 60-month look-back for relevant long-term care Medicaid applications. Transfers for less than fair market value can cause a period during which Medicaid will not pay for certain long-term care services. Some transfers are exempt, but the rules are fact-specific. Review Texas HHSC's transfer-of-assets policy before making gifts, retitling property or moving money.

Medicaid coverage can continue while the recipient remains eligible and the services remain authorized and medically necessary. It should not be described as an unconditional or automatically unlimited benefit.

Long-Term Care Insurance and Life Insurance

Long-term care insurance

An existing long-term care insurance policy may reimburse or pay benefits for covered home care, assisted living, memory care, adult day services or nursing-facility care. The contract controls what qualifies.

Ask the insurer for:

• the benefit trigger, often based on activities of daily living or cognitive impairment;
• the elimination or waiting period;
• the daily or monthly benefit;
• the remaining benefit pool;
• covered care settings and provider requirements;
• inflation protection;
• reimbursement versus indemnity payment rules; and
• the claims process and required documentation.

Do not assume a policy pays the full bill. Benefits may cover only part of the monthly cost, and some policies require the family to pay during an elimination period.

Texas also recognizes qualified Long-Term Care Partnership policies. As explained by the Texas Department of Insurance, these policies may provide dollar-for-dollar Medicaid asset protection based on benefits paid, subject to program rules.

Buying a new policy is generally not an immediate solution after a serious diagnosis or when long-term care is already needed. Eligibility, pricing and coverage depend on age, health and underwriting.

Life-insurance options

Some permanent life-insurance policies may offer cash surrender value, loans or living-benefit riders. A life settlement may also be available in certain circumstances. Each choice can reduce or eliminate the death benefit and may affect taxes or Medicaid eligibility.

Read the SIS guide, How to Use Life Insurance to Help Pay for Senior Care in Central Texas, and obtain policy-specific insurance, tax and elder-law guidance before acting.

VA Aid and Attendance Benefits

VA Aid and Attendance is not a general benefit available to every Veteran. It provides an additional monthly amount to qualifying Veterans or survivors who receive a VA pension and meet financial, service and medical requirements.

The U.S. Department of Veterans Affairs states that a qualified applicant must meet at least one applicable condition, such as needing help with activities of daily living, being largely bedridden, living in a nursing home because of physical or cognitive limitations, or meeting specified vision criteria.

Aid and Attendance payments may help with eligible care expenses, but families should not commit to a care setting based on an assumed approval date or benefit amount. Verify pension eligibility, required documentation and current processing expectations. Veterans and survivors can apply through VA or seek help from an accredited Veterans Service Organization representative.

Private Pay, Home Equity and Family Contributions

Many Central Texas families pay at least part of the cost through Social Security, pensions, savings, retirement accounts or proceeds from selling property. When several relatives contribute, put the arrangement in writing so everyone understands whether the money is a gift, loan or shared expense.

Home equity may be accessed through a home sale or, for eligible homeowners, a carefully evaluated reverse mortgage or other lending product. These choices involve fees, repayment conditions, occupancy requirements and possible effects on a spouse or future Medicaid planning. Review the decision with an independent financial professional and Texas elder-law attorney.

Families should also request a complete care quote. Assisted-living and memory-care pricing may include separate charges for medication services, incontinence support, transfers, nighttime assistance or higher levels of care. Home-care costs depend on hourly minimums, schedule, level of assistance and whether around-the-clock coverage is needed.

The useful comparison is not simply the advertised monthly rent or hourly rate. Compare the total expected cost, what each funding source will pay, how long available funds may last and what happens if needs increase.

A Step-by-Step Central Texas Funding Plan

1. Identify the care need

Clarify whether the older adult needs temporary skilled rehabilitation, intermittent home health, ongoing personal care, assisted living, memory care or nursing-facility care. The funding options change with the service.

2. Separate healthcare coverage from long-term support

Ask which services are medical and skilled, which are custodial or supportive, and which program or policy may cover each one.

3. Gather financial and insurance documents

Collect income statements, bank and investment records, deeds, life-insurance policies, long-term care policies, Medicare information, VA records and recent care bills. Confirm who owns each asset and policy.

4. Request written benefit information

Do not rely on verbal assumptions. Ask Medicare Advantage plans, insurers, Medicaid staff, VA and care providers for written eligibility, coverage and cost information whenever possible.

5. Compare the complete monthly cost

Include housing, care-level charges, medications, supplies, transportation, insurance premiums and uncovered services.

6. Protect eligibility before moving assets

If Medicaid may be needed, obtain qualified Texas elder-law advice before gifting money, adding names to accounts, transferring a home, changing policy ownership or establishing a trust.

7. Build a backup plan

Ask what happens if Medicare skilled coverage ends, an insurance claim is delayed, Medicaid is not approved, or the older adult's needs increase.

Frequently Asked Questions

What are the main ways to pay for long-term care in Central Texas?

Most families use personal income and savings, an existing long-term care insurance policy, life-insurance benefits, Texas Medicaid long-term services, eligible VA benefits or a combination of these. Medicare may cover qualifying skilled care but generally does not pay for ongoing custodial long-term care.

Does Medicare pay for assisted living or memory care?

Medicare generally does not pay the room, board or ongoing custodial-care costs of assisted living or memory care. It may continue covering separately qualifying healthcare services, prescriptions or hospice according to Medicare rules.

Does Medicare always pay for 100 days in a skilled nursing facility?

No. One hundred days is the maximum Part A SNF coverage available in a benefit period—not a guaranteed stay. The beneficiary must continue meeting skilled-care and other coverage requirements. Original Medicare and Medicare Advantage rules and costs can differ.

Does Texas Medicaid cover assisted living?

Eligible STAR+PLUS HCBS members may receive approved services in a participating assisted-living setting. Medicaid does not simply pay every assisted-living bill, and the resident remains responsible for required room and board. Program approval, medical necessity and facility participation matter.

Can long-term care insurance pay for care at home?

Many policies cover qualifying home-care services, but coverage depends on the individual contract, benefit triggers, elimination period, provider requirements and remaining benefit amount. Ask the insurer for a written policy explanation and claims checklist.

Should a family give assets away to qualify for Medicaid?

Not without qualified legal advice. Texas reviews relevant transfers during a 60-month look-back period, and transfers for less than fair market value may create a penalty. Legitimate spend-down and exempt-transfer rules are complex and fact-specific.

Can Senior Industry Services determine which benefit will pay?

No. Senior Industry Services does not determine Medicare, Medicaid, VA or insurance eligibility and does not provide legal, tax or financial advice. SIS provides educational information, local senior-care resources, hospital-to-home information and provider connections. Senior-AI is an educational resource, not a benefits determination or financial-planning tool.

Central Texas Senior-Care Resources

Families often need care and funding information at the same time. Senior Industry Services is a Central Texas resource hub connecting families and professionals with senior-care education, local provider information and hospital-to-home resources.

SIS does not guarantee providers or determine public benefits. Verify licensing, services, rates, insurance coverage and program eligibility directly with the appropriate provider, insurer or government agency.

Sources and Resources

• Medicare — Long-Term Care Coverage
• Medicare — Skilled Nursing Facility Care
• Medicare — Home Health Services
• Medicare — Hospice Care
• Texas HHSC — 2026 Nursing Facility and HCBS Waiver Information
• Texas HHSC — STAR+PLUS
• Texas HHSC — Qualified Income Trust
• Texas HHSC — Transfer of Assets
• Texas Department of Insurance — Long-Term Care Insurance Guide
• U.S. Department of Veterans Affairs — Aid and Attendance

Review note: John Brown, CSA®, reviewed this article for senior-care context and Central Texas relevance. This review does not constitute Medicare, Medicaid, VA, insurance, legal, tax or financial advice.

This article provides general educational information only. Program limits, policy benefits and eligibility rules can change and depend on individual circumstances. Verify current information with Medicare, Texas HHSC, the U.S. Department of Veterans Affairs, the insurer and appropriately qualified legal or financial professionals before making decisions.

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