California’s Move to Reinstate an Asset Test for Medi-Cal 2026

As of January 1, 2024, California eliminated asset/resource limits for many non-MAGI (Modified Adjusted Gross Income) Medi-Cal programs, meaning eligibility in those categories no longer depended on how many assets (property, savings, investments) a person had. 

However, starting January 1, 2026, California law is set to reinstate asset limits for these non-MAGI Medi-Cal programs. 

According to guidance from the California Department of Health Care Services (DHCS) and advocacy groups such as California Advocates for Nursing Home Reform (CANHR), the asset limit will be $130,000 for an individual, plus $65,000 for each additional household member (with couples and some special household definitions treated accordingly). 

Why the Change?

A few key reasons behind the reinstatement:

• Budget pressures: The state indicates that reinstating asset consideration is part of efforts to manage program costs and budget deficits. 

• Policy reversal of the 2024 elimination: The 2021 Budget Act had originally set in motion a phased elimination of asset limits (first raising, then eliminating them). 

• Clarification and guidance: In June 2025, DHCS issued a letter (ACWDL 25-14) confirming the reinstatement and giving initial guidance for county Medi-Cal offices.

Who Will Be Affected?

The asset-limit reinstatement will not apply to all Medi-Cal categories, but specifically to many non-MAGI eligibility groups such as older adults, persons with disabilities, long-term care services, and some Medicare savings programs. 

Individuals and couples currently either receiving or planning to receive Medi-Cal under those categories should pay special attention.

Some caveats:

• MAGI-based Medi-Cal programs (for children, pregnant women, and many low-income adults) generally rely on income eligibility rather than asset tests, and may not be affected the same way.

• Exempt assets will still exist: even under the reinstated rules, certain asset types remain excluded (primary residence under certain conditions, one vehicle, household goods/personal effects, burial plots/plans). 

• Timing: For new applicants on or after Jan 1, 2026, assets will be counted. For current recipients, the next renewal or a “change in circumstance” after Jan 1 2026 may trigger asset reporting. 

Key Changes to Understand

Here are some of the major changes you’ll want to know:

• Asset limit thresholds: $130,000 for a single individual, and for couples or additional household members, something like $130k + $65k (i.e., $195k for a couple in one household) under non-MAGI rules. 

• Reporting of assets: Starting Jan 1, 2026, applicants will need to report countable assets. Renewals for existing beneficiaries will incorporate asset information after that date. 

• Exempt vs countable assets: Not everything you own counts. Exemptions include your home (under certain impacts), personal belongings, one vehicle, certain retirement accounts when being paid out, etc. 

• Look-back/transfers: While specific details may still be final, making certain transfers (gifts or asset moves) in anticipation of eligibility may trigger penalty periods under Medi-Cal’s transfer rules once the asset limits are back. 

Why This Matters & What to Do Now

Why it matters:

• Individuals who assumed unlimited assets during 2024–25 might find themselves needing to meet stricter asset tests soon.

• If you are planning long-term care (nursing home or home-based services) and are relying on Medi-Cal eligibility, this law can affect your planning horizon.

• Estate planning, trusts, savings, and investments may need review — what passed under the “no asset test” period may not be as safe for future eligibility.

• Because changes are coming, being proactive may preserve more options.

What you can do now:

• Inventory your assets: Know what you own, what might be countable, and what is exempt under Medi-Cal rules.

• Consult an elder law or estate-planning attorney: Especially if you or a loved one may need long-term care and plan to rely on Medi-Cal.

• Avoid panic transfers or gifts: Transferring assets quickly before 2026 without a full understanding can trigger look-back penalties.

• Stay updated: DHCS will issue formal policy letters, and county offices will roll out forms and guidance—review those when available.

• Review trusts and ownership structures: If you have a trust (revocable or irrevocable) or assets held in various names, understand how Medi-Cal will treat those holdings under revived asset rules.

Potential Impacts & Considerations

• Re-introducing an asset test may discourage savings or asset accumulation for older adults or persons with disabilities if they foresee a need for Medi-Cal.

• Some planning strategies that worked when asset limits were eliminated may need to be revised or undone.

• If eligibility is challenged or delayed, the cost of care (especially nursing home care) can be very high — losing Medi-Cal eligibility could force persons to rely solely on private pay or liquidate assets.

• The value of a home or other large assets may raise particular concerns in high-cost areas of California. Note: separate from the asset limit is the home-equity cap likely to take effect October 1, 2028 (per federal Medicaid law), which further complicates planning. 

Final Thoughts

The potential return of asset-based eligibility testing for certain Medi-Cal programs is a major shift back from the asset-elimination policy of 2024. For many Californians — especially older adults, those with disabilities, and families planning for long-term care — it signals urgency.

While the asset limits will not necessarily mirror the low thresholds of decades past (e.g., $2,000 for an individual) in all versions of the proposal, the reinstatement means assets will again matter.

If you’re already receiving Medi-Cal, or anticipate applying for it for long-term care or disability support, now is the time to review your asset picture, speak with an experienced attorney, and plan ahead rather than react after the rules are in effect.