Written by a parent, not a doctor. Nothing here is medical advice.

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Texas program

Medicaid when medical bills are very high (spend-down)

Medicaid for individual months when large unpaid medical bills bring income below a very low limit.

What it is

Medicaid for individual months when large unpaid medical bills bring income below a very low limit.

TP 56 compares unpaid bills with income month by month. Ordinary Medicaid and MBIC usually offer broader coverage. HHSC must decide which bills and savings count before this route can help.

Eligibility rules
  • Children 18 and under and pregnant women can be considered. Each month has its own budget.
  • The monthly medically needy standard is $275 for three or $308 for four; HHSC first decides the right household. Countable resources are generally limited to $2,000, or $3,000 when HHSC’s qualifying aged-or-disabled household rule applies. A cancer diagnosis or a broad savings band alone does not settle that test, and excluded resources do not count.
What you get
  • Eligible care from the day the month’s spend-down is met.
  • Possible help for eligible months before the application.
What the help covers
  • HHSC decides eligibility and TMHP’s Medically Needy Clearinghouse tallies eligible bills. The clearinghouse number is 800-252-8263.
If you decide to apply
  1. Ask your hospital financial counselor to review TP 56 with you through Your Texas Benefits.
  2. Have unpaid bills with service dates, insurance payment statements, income and savings records ready.

Your Texas Benefits; write “TP 56 medically needy” on the application · Official page ↗

After you apply
  • Through 2026, the application month and up to three earlier months can be reviewed when unpaid bills meet the test.
  • Prior-month coverage and the application-month spend-down are reviewed separately. The child retroactive-coverage window is scheduled to shorten from three prior months to two for applications from January 1, 2027. Your financial counselor should confirm HHSC’s TP 56 transition instructions and the months and bills assigned to each budget.
  • HHSC’s calculation identifies which unpaid bills met the required amount. Medicaid starts on the day those bills reached it, not automatically the first day of that month.
Good to know

Bills paid by insurance or written off by the hospital cannot also meet a spend-down.

Other details
  • A lower current income may open ordinary Medicaid. A disability finding may open MBIC without a savings test.
  • The financial counselor can compare those routes before using unpaid bills for a month of TP 56.

Federal background: Medically needy Medicaid.

Official sources
Ask your social worker

“Are our unpaid bills large enough for TP 56, or would ordinary Medicaid or the buy-in help more? Could you work through the months with us?”

Why I’m asking: I want to know whether this would actually reduce our bills and what coverage we would receive.

More background and detailed requirements
Additional program information and published rules

Who does what

The three parts, side by side. The agency decides; nobody on this page does.

You

Apply and ask for TP 56 by name. Send every unpaid bill with service dates and the statements showing what insurance paid.

Your social worker

Asks HHSC for TP 56 by name and assembles the bills for the Medically Needy Clearinghouse.

The care team

Provides service records if asked. The team does not calculate the spend-down.

Who decides
HHSC decides each month. TMHP's clearinghouse tallies the bills
Ask your social worker
“Can you ask HHSC to run TP 56 for the months with our biggest unpaid bills, and tell us exactly which bills count?”

How to apply

First step: Apply at YourTexasBenefits.com, write “TP 56 medically needy” on the application, and gather every unpaid bill with service dates. The Medically Needy Clearinghouse is 800-252-8263.

  1. Apply at YourTexasBenefits.com, write “TP 56 medically needy” on the application, and gather every unpaid bill with service dates. The Medically Needy Clearinghouse is 800-252-8263.

Official application / program page ↗

Where it starts: Your Texas Benefits; write “TP 56 medically needy” on the application

What to gather

  • Income for the months in question
  • Itemized bills and insurance explanations of benefits with service dates
  • Proof of savings
  • Form H1120 once HHSC sends it

How long: HHSC decides each month separately (application month plus up to three prior months). The agency form tells you the spend-down amount and the months.

What a yes looks like

HHSC sends a calculation showing which unpaid bills met the required amount. Medicaid starts on the day those bills reached it.

What a no looks like, and the next move

Ask which bill, date or savings rule failed. If income is the problem and your child is in treatment, MBIC is the real option.

Watch out

  • A last resort: MBIC (child in treatment) or regular Children's Medicaid comes first and covers far more.
  • Only bills nobody else will pay count. A bill the hospital writes off or insurance pays is not a spend-down bill.
  • Countable savings above $2,000 ($3,000 in some households) end it for that month.

The numbers and the rules

The arcane layer, kept on purpose. Checked September 8, 2026.

What it is worth

Medicaid for the application month and up to three earlier months in which unpaid bills bring income below the medically needy standard ($308 a month for four).

  • $308/month — Medically needy income standard, family of four

Covers: Full Medicaid for the months in which the spend-down is met

What it costs the family: No premium. The unpaid bills themselves are the spend-down.

The eligibility facts, as published

Age max
18
Budget period
one month; application month plus up to three prior months with unpaid bills
Resource limit usd
2,000 / 3,000
Population
children 18 and under and pregnant women

The trap: Only bills nobody else will pay count. A bill the hospital writes off or insurance pays is not a spend-down bill.

Where I read this

← Back to your options