Medi-Cal Asset Limits Are Coming Back in California — What That Means for Seniors & People with Disabilities
Starting January 1, 2026, California will reinstate asset limits for many Medi-Cal programs — especially for older adults, people with disabilities, and anyone seeking long-term care. After a period where eligibility was significantly expanded by removing many asset tests, the state is now reversing course. Krause Financial+3andellaw.com+3DHCS+3
Here’s what you need to know, why this matters, and how to act now to protect your eligibility and preserve assets.
A Little History
- Prior to 2022, Medi-Cal for non-MAGI (i.e. long-term care, aged & disabled, etc.) beneficiaries had strict asset tests. Krause Financial+1
- In 2022, California raised the asset limits (to about $130,000 for an individual; $65,000 additional per household member) as part of “Phase I.” DHCS+2andellaw.com+2
- Then, effective January 1, 2024, California removed the asset test entirely for many of these non-MAGI Medi-Cal programs. This meant people could own significantly more assets and still qualify.DHCS+2andellaw.com+2
What’s Changing in 2026
- As of January 1, 2026, the asset limits are coming back. Medi-Cal will once again count countable assets when determining eligibility for non-MAGI programs. DHCS+2andellaw.com+2
- The limit will be $130,000 for an individual. For couples it is $195,000. For additional household members it adds $65,000 each. CANHR+2DHCS+2
For married couples with spousal impoverishment protections (i.e., when one spouse is institutionalized and the other remains in the community), there are special rules allowing the “community spouse” to retain more — including what’s known as the Community Spouse Resource Allowance (CSRA). CANHR+1 - Also returning: Transfer penalties (sometimes called “look-back” rules) for certain asset transfers. If assets are transferred (e.g. gifted) for less than full value after the reinstatement date, it may delay eligibility for long-term care Medi-Cal. CANHR+2OC Elder Law+2
Who Is Affected
- People 65 and older, or individuals with disabilities. DHCS+1
- Anyone applying for long-term care Medi-Cal (nursing home, institutional care) after Jan 1, 2026.OC Elder Law+1
- Existing Medi-Cal beneficiaries will be impacted at their next renewal or when there is a change in circumstance if their renewal date falls after the asset test returns. CANHR+1
What Assets Are Counted vs. Exempt
While the limit is returning, many of the rules on which assets are counted vs. which are exempt are similar to how they were before. Some exempt assets include: your primary residence (in many cases), one vehicle, household goods and personal effects, certain burial plots and prepaid burial expenses, some retirement accounts (if you are taking regular payments), etc. DHCS+2andellaw.com+2
Why This Matters for Planning
- If you currently qualify for Medi-Cal without worry over assets, this change means you may need to think ahead. Assets that exceed the new limit could disqualify you when you renew or if you apply after Jan 1, 2026.
- People who have engaged in planning strategies (e.g., gift transfers, trusts) during the no-asset-test period (2024-2025) should check whether those strategies will hold up or if there might be new exposure under the reinstated rules. andellaw.com+1
- Also, estate recovery risks may increase. Medi-Cal’s recovery of certain state costs after death may reach against existing assets if the beneficiary had asset over the limit or transfers that trigger penalties. Krause Financial+1
What You Can Do Now — Action Steps
- Take inventory of your assets. Know what is countable, what is exempt.
- Review your existing estate / elder law plan — trusts, joint ownerships, beneficiaries, etc. Get ahead of potential exposure.
- Avoid large transfers of assets after 2025 without consulting a professional. “Gift-away” strategies may work differently once the limit is back — some may trigger penalties.
- Consult with an elder law attorney or estate planner who understands Medi-Cal’s laws — especially in your county, because implementation and the county offices may have slightly different procedures.
- Watch renewal dates & reporting deadlines. After Jan 1, 2026, your next Medi-Cal renewal (or change of circumstance) is when assets will be checked again.
Conclusion
The reinstatement of Medi-Cal asset limits in California starting January 1, 2026 is a significant policy change. While the new limit is more generous than what existed decades ago, it still reintroduces constraints that were absent for a couple of years. For many seniors, disabled individuals, and families planning for long-term care, this means acting now may preserve eligibility and protect assets.
Estate planning, legal advice, and awareness are key. The window to prepare is narrowing.
