When a Houston family is trying to figure out how to pay for in-home care, two programs come up more than any other: Long-Term Care Insurance (LTCI) and Medicaid STAR+PLUS. Both can fund significant portions of home care costs. Both have eligibility requirements, timelines, and coverage details that many families don't fully understand.
This guide puts both side by side so you can quickly see which applies to your situation, what each covers, what it doesn't, and whether both can be used together.
The Fundamental Difference
Before comparing details, it's worth understanding what these two programs fundamentally are:
- LTCI is private insurance you (or your loved one) purchased and paid premiums on for years. It is an asset — something you own — and it pays based on policy terms regardless of your financial situation.
- Medicaid STAR+PLUS is a government-funded safety net program for low-income Texans. It requires you to meet both financial eligibility criteria (income and asset limits) and medical criteria (nursing-facility level of care).
Side-by-Side Comparison
| Factor | Long-Term Care Insurance | Medicaid STAR+PLUS HCBS |
|---|---|---|
| Who qualifies | Anyone with an active LTCI policy who meets the ADL benefit trigger | Low-income Texans (income <$2,742/mo, assets <$2,000) with nursing-facility-level care needs |
| Income/asset test | None — benefits based on policy, not finances | Yes — strict income and asset limits apply |
| Approval timeline | 2–8 weeks (plus elimination period of 60–90 days) | 60–120 days from application |
| Benefit amount | $150–$300+/day (policy-specific) | Set number of hours per month (MCO-managed) |
| Provider choice | Any licensed agency accepted by your carrier | Must use a Medicaid-enrolled provider |
| Duration | Until Maximum Benefit Period reached (2–5+ years depending on policy) | Ongoing while eligibility is maintained |
| Covered services | Personal care, ADL assistance, some homemaker services | PAS, respite, adult day, emergency response, home mods |
Which One Applies to Your Situation?
The answer depends primarily on two questions: Does your loved one have an LTCI policy? And do they meet Medicaid's income and asset criteria?
- Has LTCI, does not meet Medicaid criteria → Use LTCI. This is the most common situation for middle-income Houston families who purchased LTCI specifically to avoid Medicaid spend-down.
- No LTCI, meets Medicaid criteria → Apply for STAR+PLUS HCBS. Use private pay as a bridge during the 60–120 day approval period.
- No LTCI, does not meet Medicaid criteria → Private pay is the primary option. Begin Medicaid planning with an elder law attorney if long-term care costs are expected to deplete assets.
- Has LTCI and meets (or will meet) Medicaid criteria → Complex situation. LTCI should be used first; Medicaid may supplement or take over after LTCI is exhausted. Consult an elder law attorney.
Can You Use Both LTCI and Medicaid Together?
In principle, yes — but in practice, the overlap is limited. Most LTCI policyholders have too many assets to qualify for Medicaid until their LTCI benefits run out and their savings have been significantly reduced.
There is a legitimate planning strategy where a family uses LTCI to fund care for several years, exhausts the policy's maximum benefit period, and then transitions to Medicaid once assets have been spent down to the eligibility threshold. An elder law attorney can help structure this transition to preserve as much family wealth as legally possible.
The "Spend-Down" Reality
Many Houston families operate under the assumption that Medicaid will "kick in" once they can no longer afford private care. The reality is more complicated. To qualify for Medicaid, a single individual must reduce countable assets to $2,000. For a family that owns a home, a car, retirement accounts, and savings, reaching that threshold can take years of paying $6,000–$12,000 per month for care.
Important: Some assets — including the primary home (if a spouse or qualifying dependent lives there), one vehicle, and certain personal property — are excluded from the Medicaid asset calculation. An elder law attorney can identify which assets are countable and advise on legal options for protecting non-countable assets.
What Each Program Pays for Home Care in Houston
Understanding the practical dollar amounts helps families plan realistically.
LTCI in Houston: A typical Houston-area LTCI policy with a $200/day Daily Benefit Amount and a 90-day elimination period will begin paying after the family has spent approximately $18,000 out of pocket on care during the elimination period. Once benefits begin, a $200/day policy covers roughly 8 hours of professional home care per day at current Houston rates of $25–$35/hour. Policies with a $300/day DBA can cover 10–12 hours. For families with strong LTCI policies, in-home care is often fully funded by the policy for several years.
STAR+PLUS HCBS in Houston: Medicaid doesn't provide a dollar amount per day — it authorizes a number of service hours per month based on the care plan assessment. A typical authorization for a moderately impaired individual might be 60–120 hours per month of personal attendant services. For high-need individuals, authorizations can be higher. Because Medicaid reimburses at lower rates than private pay agencies charge, the actual care delivered is typically less than what an equivalent LTCI benefit would fund at market rates — but for families who could not otherwise afford any professional care, STAR+PLUS is transformative.
Planning Ahead: Using LTCI as a Bridge to Medicaid
One realistic long-term planning scenario for Houston families: a person has an LTCI policy that covers several years of care, depleting the policy's maximum benefit period over three to five years. During that time, the family's savings are also drawn down to cover the elimination period and any co-pays. By the time LTCI benefits are exhausted, the family may have spent down to Medicaid eligibility levels through legitimate care costs.
This is not a loophole — it's the system working as intended. LTCI was designed to delay reliance on public programs by funding private care first. Medicaid was designed to serve as a safety net for people who have exhausted their own resources. When both are used in sequence, they provide comprehensive coverage across a person's full long-term care journey. Working with an elder law attorney to structure the transition — particularly around asset protection for a community spouse — ensures the family retains what the law allows while accessing the care the person needs.
Frequently Asked Questions
My parent has LTCI but is also on Medicaid. Can they use both?
It depends on the policy and the specific Medicaid program. LTCI benefit payments can sometimes count as income for Medicaid purposes, potentially affecting ongoing Medicaid eligibility. This is a question for an elder law attorney familiar with both Texas Medicaid rules and your parent's specific LTCI policy terms.
Which is better — LTCI or saving for care costs?
This is a financial planning question, not a care question — and the answer depends on individual health history, risk tolerance, and financial situation. For families who already hold an LTCI policy, the question is moot: use the policy you have. For families evaluating future options, consult a financial planner who specializes in elder care planning.
Does BlueBonnet accept both LTCI and Medicaid clients?
BlueBonnet Home Health works with private pay and LTCI clients throughout Greater Houston. For Medicaid STAR+PLUS clients, we are actively expanding our Medicaid enrollment. Call us at (346) 689-2339 to discuss your specific situation and funding source.
Not Sure Which Funding Path Applies to You?
BlueBonnet Home Health helps Houston families understand their options. A free assessment is always the right starting point.
Book Your Free Assessment