Full Definition

Texas Medicaid divides assets into “countable” and “exempt” categories. Only countable assets — cash, bank accounts, investments, most life insurance cash values, and additional real estate — count toward the $2,000 resource limit. Exempt assets are excluded from the calculation.

Common Medicaid-exempt assets in Texas include: the primary residence (as long as the applicant or spouse intends to return, or a dependent lives there), one vehicle of any value, household goods and personal belongings, a prepaid irrevocable funeral contract, term life insurance, burial spaces for family members, and certain retirement accounts (though the rules on IRAs and 401(k)s vary).

For married couples, the community spouse’s assets are partially protected through the Community Spouse Resource Allowance. The spouse who remains in the community does not have to spend all of their assets before Medicaid covers the institutionalized spouse.

Understanding which assets are exempt is critical to Medicaid planning. In many cases, a senior has more protected assets than they realize. An elder law attorney can conduct a full asset review to identify which resources are already protected and which need to be addressed through a spend-down plan.