I. OVERVIEW
After nearly two years of asset limit elimination, California will reinstate an asset limit for older adults and people with disabilities receiving Medi-Cal effective January 1, 2026. This significant policy change reverses the 2024 elimination of asset limits and requires advocates and practitioners to understand the new rules and their impact on clients.
II. KEY CHANGES
New Asset Limits (Effective January 1, 2026)
For Individuals: $130,000 per person
For Households: Each additional person in the household increases the asset limit by $65,000
Example: A household with two eligible members has a combined asset limit of $195,000 ($130,000 + $65,000)
Affected Programs
The asset limit applies to all non-expansion Medi-Cal programs serving older adults and people with disabilities, including:
- Aged, Blind, and Disabled (ABD) Program
- Medi-Cal with a Share of Cost (medically needy programs)
- 250% Working Disabled Program
- Long-Term Care programs
- Medicare Savings Programs (QMB, SLMB, QI, QDWI)
Important Note: The asset limit does NOT apply to younger adults and children enrolled in Medicaid expansion programs.
III. ASSETS THAT COUNT AND DON'T COUNT
Countable Assets (Assets Subject to Limit)
- Cash on hand and savings accounts
- Stocks, bonds, and investment accounts
- Secondary properties (beyond primary residence)
- Vehicles beyond one exempt vehicle
Exempt Assets (Do NOT Count Toward the Limit)
- Primary residence (the home where the person lives)
- One vehicle
- Household furnishings and personal effects
- IRA and pension accounts when recipient is receiving periodic payments
- Other assets as defined in prior Medi-Cal regulations (MC 007)
Practitioners should reference the Department of Health Care Services regulations (MC 007) for a complete list of exempt and countable assets.
IV. IMPLEMENTATION TIMELINE
For Current Medi-Cal Beneficiaries
Current Medi-Cal members will be required to report asset information during their next annual renewal occurring on or after January 1, 2026. This means clients will not need to provide asset documentation until their regular renewal month in 2026 or later.
Example: A client with a December 2025 renewal will not be required to report assets until their December 2026 renewal.
For New Applicants
All individuals submitting new Medi-Cal applications on or after January 1, 2026, must report asset information as part of the application process.
Outreach and Client Notification
The California Department of Health Care Services (DHCS) mailed outreach notices to all affected Medi-Cal members. in October 2025. These notices explain:
- The upcoming asset limit change
- Which assets are counted and exempt
- What actions clients must take
Practitioners should refer clients to these notices if they have questions about how the rules apply to their specific situation.
V. SPECIAL CIRCUMSTANCES
Spousal Impoverishment Protections
When one spouse needs long-term services and supports (LTSS), spousal impoverishment protections apply:
- Institutionalized Spouse: Can retain up to $130,000 in countable assets.
- Community Spouse: Can retain assets up to the Community Spouse Resource Allowance (CSRA), currently set at $157,920 (as of 2025, adjusted annually).
This means a married couple receiving HCBS can protect significantly more assets than a single person. The couple should carefully manage asset transfers to the community spouse to maximize this protection.
VI. IMPACT ON MEDI-CAL ELIGIBILITY
Possible Ineligibility Scenarios
Clients may lose Medi-Cal eligibility if their countable assets exceed the limit. However, they may regain eligibility if they reduce countable assets by:
- Using assets for living expenses
- Making necessary home or vehicle repairs
- Transferring assets to a community spouse (when applicable)
- Converting countable assets to exempt assets (e.g., investing in necessary home improvements)
Estate Recovery and Other Programs Unaffected
The reinstatement of asset limits does NOT change:
- Medi-Cal estate recovery requirements
- Income eligibility rules for SSI and CalFresh
- Other public benefit programs
Estate recovery will continue to apply as established by federal law.
VII. PRACTITIONER GUIDANCE
Client Education
Advise clients to:
- Review current assets with a focus on what counts toward the limit and what is exempt.
- Plan ahead if they anticipate renewal before January 1, 2026 (no change to current rules until then).
- Act by January 2026 if they have countable assets near or exceeding the limit, considering legitimate planning strategies.
- Preserve documentation of asset values, particularly for vehicles and property.
Strategic Planning Opportunities
For clients with assets exceeding the limit, consider legitimate planning strategies such as:
- Home and vehicle improvements (exempt assets benefit from modification)
- Spousal transfers for married couples with one LTSS recipient
- Accessibility modifications to primary residence
Documentation Requirements
When clients renew Medi-Cal, they will need to provide recent documentation of assets, including:
- Bank statements (typically within 2-3 months of the application date)
- Property valuations
- Vehicle registration and value estimates
- Investment account statements
Practitioners should counsel clients on the importance of organizing and providing this documentation promptly to avoid loss of coverage.
VIII. IMPORTANT REMINDERS
- Income Still Matters: The asset limit is separate from income eligibility. Clients must meet both asset AND income requirements to remain on Medi-Cal.
- No Retroactive Application: The asset limit does not apply retroactively to periods before January 1, 2026.
- Impact on Long-Term Care: For clients needing nursing home or home and community-based services, the asset limit can significantly affect planning for long-term care costs. Consider discussing supplemental planning strategies.
IX. RESOURCES
- Justice in Aging: Reinstatement of the Medi-Cal Asset Limit: What Advocates Need to Know - Justice in Aging (comprehensive FAQs and advocacy materials)
- DHCS Asset Limit Information: Look for MEDIL 25-23 and outreach notices mailed in October 2025
- California Advocates for Nursing Home Reform (CANHR): Information on estate recovery and long-term care planning (2026 Asset Limit Reinstatement Frequently Asked Questions - CANHR)
- Contact DHCS: For specific questions about individual cases, practitioners can contact the Medi-Cal Eligibility Division
Disclaimer: This advisory provides general information about Medi-Cal asset limit rules effective January 1, 2026. It is not legal advice. Practitioners should verify the current regulations with DHCS and consider consulting with legal specialists for complex situations involving spousal impoverishment, estate planning, or disputed eligibility determinations.
