Medi-Cal Asset Rules Are Changing — Here’s What You Need to Know (as of September 2025)
Medi-Cal Asset Rules Are Changing — Here’s What You Need to Know (as of September 2025)
What’s Changing — Here’s the Update
California will reinstate asset limits for Medi-Cal programs beginning January 1, 2026. These limits apply to long-term care eligibility for individuals who are 65 or older, have a disability, or reside in a nursing home.
New Asset Thresholds Starting 2026:
$130,000 for individuals
$195,000 for couples or household units
Note: For couples qualified under spousal impoverishment protections, the "institutionalized spouse" may retain up to $130,000, while the "community spouse" may keep a Community Spouse Resource Allowance (CSRA)—$157,920 for 2025.
A Brief Timeline of Policy Shifts
Pre-2024: Strict asset caps—approximately $2,000 for individuals and $3,000 for couples.
January 2024: California eliminated Medi-Cal asset limits, simplifying eligibility and reducing financial barriers.
2025 Legislative Session: Due to rising costs, asset limits were reinstated in the state's budget deal and set to return as of January 1, 2026.
Who Will Be Affected and When?
New applicants applying on or after January 1, 2026, must comply with the asset limits in effect.
Current beneficiaries will have their assets reviewed at their next annual Medi-Cal renewal or following a Change in Circumstances (CIC) report (e.g. income, property, household changes).
What Counts as an Asset (or Is Exempt)?
California will maintain previous exemptions, such as:
Your primary residence
One vehicle
Household goods, personal items, and clothing
Small burial funds, term or small whole life insurance
Certain retirement accounts (if taking periodic distributions)
Up to $130,000 in property reserves
Transfer Penalties Are Back
Starting in 2026, Medi-Cal will again enforce transfer penalties for moving assets to become eligible for long-term care Medi-Cal. However:
2025 remains penalty-free, allowing more flexibility.
Only transfers exceeding the Average Private Pay Rate (APPR)—$13,656 in 2025—will trigger penalty periods.
Example:
Transferring $12,000 below the APPR when you have $142,000 in assets results in no penalty.
Transferring $20,000 (while over the limit) may suspend benefits for roughly 1½ months.(CANHR)
What You Should Do Now
Review your assets now to evaluate whether you’re close to the new limits.
If you’re nearing or over the threshold, consider legal strategies to align or restructure assets before January 1, 2026.
Consult with an estate planning attorney—actions taken in 2025 could significantly affect your eligibility and peace of mind.
Being proactive now can safeguard your Medi-Cal eligibility and protect your assets. Changes are coming—planning ahead ensures you don’t face unnecessary disruption.
Disclaimer: This content is for educational purposes only. Always consult a licensed attorney regarding your specific situation.