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

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

Practitioners should reference the Department of Health Care Services regulations (MC 007) for a complete list of exempt and countable assets.

IV. IMPLEMENTATION TIMELINE

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

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.

About the APILO’s Elder and Disability Rights Project:

APILO’s Elder and Disability Rights Project provides legal services in a variety of areas to assist elders and individuals with disabilities to receive public benefits and live a life free from abuse. The Elder Team works to both to prevent abuse towards elders and people with disabilities and to assist survivors of abuse. We work closely with senior centers, churches, and senior meal sites to keep our services accessible. With a team of exemplary attorneys and dedicated staff, the team provides a wide range of legal services, including naturalization assistance, other immigration cases, elder abuse, estate planning, eviction defense, conservatorship, guardianship, and restraining orders to name a few.

If you want to learn more about what our team does, please feel free to reach out to us.