Beginning January 1, 2026, California will reinstate the Medi-Cal asset test for applicants over age 65 seeking long-term care benefits, limiting eligibility to $130,000 in countable assets (plus $65,000 for each additional household member). In this video, Attorney Justin M. Kennedy of Litherland, Kennedy & Associates explains what this change means, which assets are exempt, and why 2025 is a crucial window for families to engage in Medi-Cal planning to protect eligibility, preserve assets, and avoid costly mistakes.
TRANSCRIPT:
Hello, I’m attorney Justin M. Kennedy with Litherland, Kennedy & Associates, a California estate planning and elder care law firm.
I want to let you know that the Medi-Cal asset test is returning in 2026. Specifically, what you need to know about eligibility. Beginning January 1st, 2026, the State of California will once again require Medi=Cal applicants over age 65 seeking Medi-Cal benefits to meet a strict asset test. This means individuals may only have $130,000 in countable non-exempt assets plus $65,000 for each additional household member up to 10 people total.
Who does this impact? It does not impact you if you have covered California Medi-Cal, which acts as a health insurance for doctor visits or preventative care. It does impact you if you or your loved one will need Medi-Cal benefits such as long-term care, IHSS, etc., or to maintain the Medi-Cal benefits they currently have. Even with the return of the asset test, some assets are exempt and not counted towards the $130,000 Medi-Cal asset limit, such as your home, your personal and household belongings, one vehicle, and your retirement accounts if you are taking periodic distributions.
So why act now? In 2024, California removed the Medi-Cal asset test. This effectively made all assets exempt. California just changed the law to bring back the $130,000 Medi-Cal asset test as of January 1st, 2026. This leaves a limited window in 2025 to engage in strategic Medi-Cal planning before the asset limit returns. Let’s look at some real-world scenarios. Imagine you are caring for an aging parent who might need skilled nursing care in the next year or two. If their countable assets are above $130,000 in 2026, then they may be denied Medi-Cal and forced to pay the full skilled nursing facility costs out of pocket. Or you or a loved one may already be approved for long-term care Medi-Cal and will lose eligibility once the asset test returns.
This is where we can help. Litherland, Kennedy & Associates has guided hundreds of families through the process of Medi-Cal planning to secure Medi-Cal eligibility, avoid the Medi-Cal Estate Recovery Lien, and preserve our clients’ legacies. We recommend that you start the Medi-Cal planning process when you see a need for skilled nursing facility level care on the horizon. And everyone’s horizon may be different.
To find out if now is the right time to engage in Medi-Cal planning, please call our office to speak with our geriatric care manager, Dedra Jize, who understands the medical and financial aspects of long-term care. 2025 is your window to prepare. For more information, please visit our website and complete the contact us form or subscribe for updates in future videos on Medi-Cal and estate planning. Thank you.
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