Texas Long-Term Care Insurance Information

Planning for long-term care in Texas means understanding your options before a health crisis forces the decision. Costs are rising fast, and the gap between what families can afford and what care actually costs is widening every year. 

Texans who need long-term health care services have access to a wide range of options, including:

• Adult day care centers
• Assisted living facilities
• Continuing care retirement communities (CCRCs)
• Home health care providers
• Memory care facilities
• Rehabilitation facilities
• Traditional nursing homes

Long-term care in Texas is expensive and the costs vary considerably depending on the type and setting of care, as well as where in Texas you or a loved one resides. Use the LTC News Cost of Long-Term Care Services Calculator to find the current and project future cost of long-term care servcies anywhere in Texas, or nationwide. 

Federal Long-Term Care Partnership Program

The State of Texas participates in the federal/state Long-Term Care Insurance Partnership Program. Authorized by the federal Deficit Reduction Act of 2005 and signed into law by President George W. Bush, the program gives states the ability to provide additional asset protection to residents who purchase qualified Long-Term Care Insurance policies.

The Texas Long-Term Care Insurance Partnership is a collaborative effort among private LTC Insurance carriers, their authorized agents and state agencies, including the Texas Department of Insurance, the Texas Health and Human Services Commission, and the Texas Department of Aging and Disability Services.

Partnership policies must meet state and federal guidelines and carry three key features: an "asset disregard" benefit, inflation protection and tax-qualified status.

How Asset Protection Works

The asset disregard provision is a meaningful benefit. If a Texan exhausts the benefits in a qualified partnership LTC policy, the total amount paid by that policy is shielded dollar-for-dollar when calculating Medicaid eligibility. For example, if your policy pays $350,000 in benefits, you can protect $350,000 in assets above Medicaid's standard $2,000 spend-down limit and still qualify for Medicaid long-term care coverage. That same protection extends to Medicaid estate recovery after death.

Reciprocity

Most states have reciprocity with other states' partnership programs, including Texas. If you move to or from Texas, your partnership asset protection follows you.

Medicaid

Long-Term Care Medicaid requires a spend-down to $2,000 in countable assets for a single applicant. A spouse's monthly income allowance is $4,066.50. The community spouse may keep between $32,532 and $162,660 in countable assets. The home equity limit is $752,000.

For more information about the Medicaid program, visit www.medicaid.gov.

Texas Medicaid Estate Recovery Program (MERP)

Medicaid will never require a living spouse to leave the family home. But once a Medicaid recipient dies, Texas has the right to seek reimbursement from the estate. Texas Health and Human Services administers MERP and will send a notice to the estate representative or heirs indicating the state's intent to file a claim. The state may look back up to 60 months before a Medicaid application to review asset transfers.

Learn More: Texas Health and Human Services

MERP does not apply when there is a surviving spouse, a surviving child under age 21, a surviving child who is blind or disabled, or an unmarried adult child who lived continuously in the home for at least one year before the recipient's death. If you had a qualified Partnership LTC policy, the total benefits paid by that policy are sheltered from estate recovery — a significant protection for families who planned ahead.

Rate Stability Rules

Texas consumers also benefit from Long-Term Care Insurance Rate Stability Rules, developed by the National Association of Insurance Commissioners (NAIC). These rules make it considerably more difficult for insurance companies to obtain state approval for premium rate increases.

Products Approved in Texas

A variety of products are approved in Texas for Long-Term Care planning. These include traditional plans in addition to partnership-certified policies, limited-duration cash indemnity policies, and asset-based "hybrid" policies.

Tax Incentives

Texas does not offer any state tax incentive for qualified Long-Term Care Insurance as there is no state income tax. However, federal tax incentives are available and proceeds are generally tax-free.

Reverse Mortgages in Texas

Texas homeowners 62 or older can use a reverse mortgage to access home equity without selling their home. Uses include supplementing retirement income, reducing monthly expenses, funding Long-Term Care Insurance, or covering long-term care costs directly.

You can receive funds as a lump sum, monthly payments, or a line of credit — giving you flexibility based on your needs.

Texas Requirements

To qualify, you must be 62 or older. In Texas, both spouses must meet the age requirement. The home must be your primary residence — vacation homes and rental properties do not qualify. You must have substantial home equity, typically at least 50 percent or more. If you still have an existing mortgage, it must be low enough that the reverse mortgage proceeds can pay it off completely at closing. 

Texas law also prohibits participating in property tax deferral programs while a reverse mortgage is in place. Before closing, Texas requires borrowers to complete counseling regarding the advisability and availability of reverse mortgages and other financial alternatives. 

The most common product is the federally insured Home Equity Conversion Mortgage (HECM). The FHA lending limit for HECMs in 2026 is $1,249,125. Jumbo reverse mortgages are available for higher-value homes above that threshold. 

Your Ongoing Responsibilities

As the borrower, you remain responsible for property taxes, homeowners insurance, and home maintenance. Failing to meet those obligations can result in the loan becoming due, and potentially foreclosure. A reverse mortgage does not need to be repaid until you sell the home, move out permanently, or pass away.

Learn more about reverse mortgages — LTC News Reverse Mortgage Learning Center. 

Life Settlements and Viatical Settlements in Texas

If you own a life insurance policy you no longer need, or can no longer afford, a life settlement may allow you to convert it into cash to help pay for long-term care.

A life settlement allows you to sell your life insurance policy to a licensed buyer for a lump sum greater than the policy's cash surrender value but less than the death benefit. The buyer takes over premium payments and collects the death benefit later. For individuals facing a serious or terminal illness, a viatical settlement works the same way but typically offers a higher payout and faster access to funds due to the shorter life expectancy.

Proceeds from either type of settlement can be used to:

• Pay for in-home care, assisted living, or nursing home services
• Cover hospice or palliative care expenses
• Fund medications, medical equipment, or therapies
• Reduce the financial burden on family members

For individuals facing a terminal illness, a viatical settlement can provide immediate funds to improve comfort, care quality and quality of life.

Texas Regulation

Life settlements in Texas are licensed under Texas Insurance Code Chapter 1111A, with regulations found in Title 28 of the Texas Administrative Code. Life settlements can be both an insurance product and a securities product, potentially subject to oversight by both the Texas Department of Insurance and the State Securities Board. 

The Texas Department of Insurance regulates the viatical settlement process to ensure fairness and compliance with state law. Texas law also provides a rescission period — typically 15 days after receiving proceeds — during which you can cancel the transaction and return the funds without penalty. 

Buyers and brokers must be licensed in Texas. Always work with a licensed provider and consider consulting an independent financial advisor or elder law attorney before proceeding. Remember that selling your policy will reduce or eliminate the death benefit for your beneficiaries. Learn more about life settlements/viatical settlements on LTC News.

State Resources for Aging and Long-Term Care in Texas

Texas Health and Human Services Commission (HHSC) The primary state agency overseeing long-term care services, Medicaid, and aging programs in Texas. Texas HHSC | 211 (statewide helpline)

Texas Department of Insurance (TDI) Regulates Long-Term Care Insurance in Texas, including the Partnership Program. Offers consumer guides and agent lookup tools. Texas TDI

Texas Area Agencies on Aging (AAA) Texas has 28 Area Agencies on Aging providing services to help people age 60 and older, their family members and caregivers access community services and long-term supports. | 800-252-9240 Texas Health and Human Services

Texas Aging and Disability Resource Centers (ADRCs) ADRCs provide referrals and access to long-term services and specialized supports for older adults and people with disabilities across all 254 Texas counties. Texas Health and Human Services

Texas Long-Term Care Ombudsman Program Advocates for optimal quality of life and quality of care for residents in nursing homes and assisted living facilities. Services are free and confidential. Texas Long-Term Care - Find Ombudsman | 800-252-2412 

Texas Adult Protective Services Investigates reports of abuse, neglect and financial exploitation of older adults and adults with disabilities. Texas Adult Protective Services | 800-252-5400

Texas Attorney General – Elder Fraud and Protection Handles Medicaid fraud and elder financial abuse complaints. Texas Attorney General | 800-252-8011

Own Your Future Texas (LTC Partnership Program) State initiative to help Texans understand the importance of long-term care planning and the Partnership Program. Own Your Future | Texas Long-Term Care Partnership

2-1-1 Texas A statewide helpline connecting Texans to health and human services, including senior and caregiver resources. 2-1-1 Texas | Texas Health And Human Services Commission | Dial 2-1-1

AARP Texas Advocacy, research and resources for adults 50 and older, including caregiving support and long-term care planning tools. AARP Texas

Alzheimer's Association – Texas Chapters Support groups, care consultations and education for those affected by Alzheimer's disease and related dementias across Texas. Texas Chapter | Alzheimer’s Association| 800-272-3900 (24/7 Helpline)

*The federal government sets a new minimum and maximum amounts each year, but states can set their own minimum requirements at any level between the federal limits. This information is based on the best available sources.