SERVICES

What Type of Plan is Medi-Cal?

Medi-Cal is California’s Medicaid health care program. It provides coverage for a wide range of medical services, including long-term care in a skilled nursing facility, for those who meet eligibility requirements.

Despite common misconceptions, Long-Term Care Medi-Cal is not a poverty-based program. With proper planning, individuals can qualify while preserving a significant portion of their assets.

Long-Term Care Medi-Cal is available to individuals age 50 or older, regardless of immigration status, and is funded by both state and federal sources.

To qualify, you must satisfy two core requirements:

• Medical necessity (doctor-ordered skilled nursing care)
• Financial eligibility, including asset rules (as applicable based on current law)

Medi-Cal Asset Limits (2026 Rules)

Medi-Cal eligibility rules changed significantly in recent years.

• 2024–2025: No asset limit
• Beginning January 1, 2026: Asset limits have returned

Under current law, Medi-Cal distinguishes between:

• Exempt assets (not counted, regardless of value)
• Non-exempt assets (fully countable)

Current 2026 Asset Limits:

• Single applicant: $130,000 in non-exempt assets
• Married couple (both applying): $195,000
• Additional household member allowance: +$65,000 per person

The widely common myth that you must have “only $2,000” to qualify is incorrect and has never been accurate.

Home
Your primary residence is one of the most valuable exempt assets.

It remains exempt if:

• It is your principal residence, and
• You state an intent to return home, even if returning is unlikely

There is no equity limit under these rules, and the definition of “home” is broad.

Community Spouse Resource Allowance (CSRA)
The Community Spouse Resource Allowance (CSRA) protects the spouse who remains at home.

• 2026 CSRA: $162,660(adjusted annually)

This allows the healthy spouse to retain significant assets in addition to exempt property, creating powerful planning opportunities.

IRA and Pensions
IRAs and pensions are generally exempt assets if:

• Required Minimum Distributions (RMDs) are being taken

However, distributions may impact:

• Monthly Resident Cost (share of cost)

Vehicles

• One vehicle is exempt
• No value limit applies

Jewelry

• Wedding rings, engagement rings, and heirlooms are exempt
• Additional jewelry (limited for single applicants) may be counted

Household Goods and Personal Effects

• Fully exempt
• No value limitation

Life Insurance or Term Life Insurance

• Policies ≤ $1,500 face value: exempt
• Policies > $1,500: cash surrender value is countable
• Term life insurance: fully exempt

Burial Plots or Plans

• Burial plots and irrevocable burial plans: exempt
• Burial funds ≤ $1,500: exempt

Business Property
Business property may be exempt if it is:

• Actively used for income or self-support
• Properly documented as a business (not passive investment property)

Certain Annuities
Annuities must be reviewed individually.

• Some qualify as exempt
• Others are fully countable

This is a highly technical area requiring legal analysis.

Unavailable Property
If you make a good faith effort to sell or convert an asset but cannot:

• The asset may be treated as unavailable
• It may not be counted for eligibility

After Acquired Property
After eligibility is established:

• Assets acquired by the community spouse typically do not affect eligibility
• Assets acquired by the institutionalized spouse must be handled promptly

Timing and legal authority (such as powers of attorney) are critical.

Additional Household Members
Medi-Cal allows increased asset limits for larger households:

• +$65,000 per additional household member (MFBU)

This can significantly expand eligibility thresholds.

How to Qualify for Medi-Cal in CA

Qualifying for Long-Term Care Medi-Cal requires strategic planning, not guesswork.

Your eligibility depends on:

• Asset structure
• Income
• Marital status
• Timing (especially due to the 2026 rule changes)

Spend Down Approach
Reduce non-exempt assets by spending on items that benefit you, such as:

• Home improvements
• Medical needs
• Personal items

No requirement that spending be medical-related—only that it benefits you.

Gifting Approach (Use With Caution)
As of 2026:

• A 30-month lookback period applies
• Improper transfers trigger penalty periods of ineligibility

DIY gifting strategies often cause serious eligibility problems.

Conversion Approach
Convert non-exempt assets into exempt assets, such as:

• Paying off a mortgage
• Improving your home
• Purchasing exempt resources

Combined Approach

Most effective plans use a combination of strategies, customized to the individual.

Does an Irrevocable Trust Protect Assets from Medi-Cal?

Yes—when properly structured.

An Irrevocable Medi-Cal Asset Preservation Trust can:

• Protect assets from being counted
• Avoid probate
• Minimize or eliminate estate recovery
• Preserve tax advantages (including step-up in basis)
• Protect assets from creditors and family risk

These trusts must be carefully designed to comply with:

• The 30-month lookback rule
• Current Medi-Cal regulations

Do I Have to Pay Back Medi-Cal?

Possibly—but only under limited circumstances.

Under California law (SB 833):

• Applies to individuals age 55+
• Limited to long-term care services
• Only applies to probate assets
• No recovery against a surviving spouse

Key Insight:

Assets that avoid probate—such as:

• Trust assets
• Retirement accounts
• Life insurance

…generally avoid Medi-Cal estate recovery entirely.

Strategic Takeaway

Long-Term Care Medi-Cal planning has fundamentally changed.

• You are not required to be impoverished to qualify
• The return of the asset test in 2026 makes planning critical again
• Mistakes—especially with gifting—can be costly

Proper planning allows you to:

• Qualify for benefits
• Preserve your assets
• Protect your family’s inheritance

Additional Resources

California Advocates for Nursing Home Reform (CANHR)
Visit the official website for the California Advocates for Nursing Home Reform to learn more about Long-Term Care Medi-Cal. Access the site to find links to the application, the various county Medi-Cal offices, Medi-Cal fact sheets, information regarding recovery, and more.

Med-Cal Providers
Visit the website for California’s official Medi-Cal program to learn more about what it offers and if you’re eligible. Access the site to use their learning portal, sign up for their subscription service to keep you up to date on the latest Medi-Cal news, and use their automated provider services for claims, eligibility inquires, and other services.

Attorneys for Long-Term Care Medi-Cal | Elder Law Services in Ventura County, Los Angeles County and Central California

It’s an unfortunate reality that nursing home care costs Californians an average of $120,000 annually. These shockingly high costs sadly leave thousands and thousands of elderly individuals and couples bankrupt despite many years of financial success. The best way to avoid this scenario is to implement proper long-term care planning in your estate plan including Medi-Cal if it’s beneficial to you.