Medi-Cal's Shifting Sands: What California's Reinstated Asset Limits Mean for Your Estate Plan

Seniors, disabled persons and those who care for them are feeling the whiplash yet again with the latest changes to Medi-Cal eligibility set to take effect January 1, 2026.

For many years, estate planning for Californians has included strategies to navigate complex Medi-Cal eligibility rules, particularly for those needing long-term care. The rules often required individuals to "spend down" their savings and assets to qualify for essential benefits.

In a major change that brought relief to many, California eliminated the asset limit for most Medi-Cal programs as of January 1, 2024. For a brief period, eligibility was determined solely by income, and applicants were not required to report their assets. This was a welcome development, offering a simplified path to care for seniors and people with disabilities.

However, the landscape is changing again. Due to state budget concerns, California has decided to reinstate an asset limit, effective January 1, 2026.

The Return of Asset Limits: What You Need to Know

Starting in 2026, assets will once again be considered for eligibility, specifically for non-Modified Adjusted Gross Income (non-MAGI) programs. This primarily impacts:

• Seniors (age 65 and older)

• Individuals with disabilities

• Those requiring long-term care

Among the affected are family caregivers such as adult children, known as the "sandwich generation," who help their senior parents manage their daily needs and often shoulder the financial burden of their aging loved ones.

While this may seem like a step backward, the new limits are significantly higher than the previous ones, providing a larger safety net for many families.

The reinstated asset limits will be:

• $130,000 for a single individual.

• $195,000 for a couple.

• The limit increases by $65,000 for each additional household member.

It’s crucial to remember that not all assets are counted. Exempt assets, such as your primary residence, one vehicle, household goods, and some retirement accounts, will likely remain protected.

Why This Matters for Your Estate Plan

These changes are significant for anyone with a Medi-Cal plan or considering long-term care.

• The "Now" (Through December 31, 2025): If you are applying for or renewing Medi-Cal today, your assets are not a factor. This remains a favorable window for many to get or maintain coverage.

• The "Future" (Starting January 1, 2026): If you are a senior, have a disability, or anticipate needing long-term care, your assets will be reviewed at your next renewal or when you apply. This means a proactive approach to your estate plan is more important than ever.

  
  

The reinstatement of these asset limits underscores the need for robust, flexible estate planning. Without a well-thought-out plan, you may be forced to spend down your savings to meet the new limits, putting your financial security at risk.

Working with an experienced elder law or estate planning attorney is the best way to understand how these new rules will affect your unique situation. They can help you explore strategies, such as using specific types of trusts or other legal tools, to protect your assets while ensuring you remain eligible for the benefits you need. Don't wait until it's too late—proactive planning is key to navigating the complex and ever-changing world of Medi-Cal.

Disclaimer: This blog article is for educational purposes only and is not legal advice. No attorney client relationship is formed as a result of reading this article or accessing this website.