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.
California has brought back the Medi-Cal asset test in 2026, changing how assets affect eligibility for certain Medi-Cal programs.
Beginning January 1, 2026, California again considers assets when determining eligibility for certain Medi-Cal applicants and current members. For people who may need long-term care, nursing home care, or other qualifying Medi-Cal services, understanding these rules can be especially important.
Here is what California families should know about the Medi-Cal asset limits and how they may affect long-term care planning.
What Is the Medi-Cal Asset Limit in 2026?
Through June 30, 2027, the Medi-Cal asset limit is generally:
- $130,000 for one person
- An additional $65,000 for each additional household member up to 10 people
These limits apply to countable assets rather than everything a person owns.
California’s Department of Health Care Services notes that some married couples and registered domestic partners may also qualify for higher limits under a rule that protects a spouse from losing all their assets.
The rules apply to certain Medi-Cal applicants and members, including people who are age 65 or older, have a disability, live in a nursing home, or live in a family that makes too much money to qualify under federal tax rules.
Which Assets Count Toward the Medi-Cal Asset Test?
Examples of assets that may count include:
- Cash
- Checking and savings accounts
- Stocks, bonds, and other investments
- A second home or other real estate
- Additional vehicles
- Other financial resources
Not every asset counts toward the $130,000 limit. Assets that generally do not count include:
- Your primary residence
- Your primary vehicle
- Household goods and personal belongings like furniture and clothing
- Certain retirement accounts, if you are receiving regular payments
Because the treatment of an asset can depend on the type of Medi-Cal benefits involved and your individual circumstances, you should not assume an asset is exempt without reviewing the applicable rules.
How Could the 2026 Medi-Cal Asset Test Affect Long-Term Care?
The return of the asset test may affect families in several ways:
- An aging parent may need skilled nursing care. If their countable assets exceed the applicable Medi-Cal limit, they may not qualify until they meet the eligibility requirements.
- Families may need to use other resources for care. Without Medi-Cal eligibility, nursing home or long-term care costs may need to be paid from other available assets or resources.
- Current Medi-Cal recipients may also be affected. Someone already receiving long-term care Medi-Cal may need to report their assets during the renewal process.
- Giving assets away may create problems. Reducing countable assets is not always as simple as transferring money or property to family members.
- Certain transfers can affect long-term care coverage. California rules may delay long-term care Medi-Cal benefits when assets are transferred for less than fair market value.
For these reasons, it can be important to review your options before making significant transfers or changes to your assets.
Medi-Cal Planning May Help You Prepare
Litherland, Kennedy & Associates has experience guiding California families through Medi-Cal and long-term care planning. The appropriate strategy depends on each person’s health and long-term care needs, assets, family circumstances, and timing.
Depending on the situation, planning may involve determining which assets are countable, reviewing available exemptions, considering appropriate spend-down strategies, and coordinating long-term care planning with your broader estate plan.
Planning may also involve understanding California’s separate Medi-Cal Estate Recovery rules. The asset test and estate recovery are not the same thing, and different rules apply to each.
Review Your Medi-Cal Planning Options
The return of the Medi-Cal asset test in 2026 makes it important to understand how the rules may affect you or an aging loved one.
If skilled nursing or other long-term care may be on the horizon, reviewing your options before a crisis develops can give you more time to understand the available planning strategies.
Eligibility and planning strategies depend on individual circumstances and current law. Consider consulting qualified legal and financial professionals before making significant changes to your assets.
For information about Medi-Cal and estate planning, visit Litherland, Kennedy & Associates in Campbell, California or complete the firm’s contact form.
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