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California’s Medi-Cal eligibility rules have significantly changed as of January 1, 2026. After several years without an asset limit for many long-term care Medi-Cal programs, the state is reinstating the asset limit for Long-Term Care Medi-Cal. This change impacts many older Californians and people with disabilities who rely on Medi-Cal benefits to help pay for care.

What the 2026 Asset Limit Means for You

Starting January 1, 2026, Medi-Cal will once again require individuals to meet an asset limit to qualify for many Medi-Cal programs:

• $130,000 is the maximum in countable assets for an individual
• $195,000 is the maximum limit for married couples or domestic partners when both seek Medi-Cal eligibility
• $287,920 is the maximum limit for married couples or domestic partners when one spouse/partner seeks Medi-Cal eligibility
• An additional $65,000 for each additional household member for those in the same Medi-Cal Family Budget Unit (MFBU)

When You Must Report Your Assets

If you are applying for Medi-Cal on or after January 1, 2026, you will need to report your assets at the time of your application. If you already have Medi-Cal, you’ll be asked to provide updated asset information during your next annual redetermination.

What Counts as a Countable (Non-Exempt) Asset

Not everything you own counts toward the Medi-Cal asset limit. Exempt assets generally include:

• Your primary residence
• One vehicle
• Household goods and personal effects
• Certain types of life insurance
• Burial plots and prepaid burial arrangements
• Retirement accounts that pay out periodic benefits

These are consistent with Medi-Cal’s pre-2024 definitions of exempt vs. countable assets. For a detailed list of countable (exempt) assets and non-countable (non-exempt) assets, download our free eBook: Understanding Long Term Care Medi-Cal Planning.

Transfer Penalties and “Look-Back” Rules

Under the 2026 rules, transfers of assets made after January 1, 2026, by existing recipients for Medi-Cal or new applicants for less than fair market value may trigger penalty periods and loss of coverage. It is important to understand how the look-back rules interact with your care planning, particularly if you or a loved one may soon require long-term care in a skilled nursing facility.

What You Should Do Now if You are an Existing Medi-Cal Recipient

An immediate self-assessment must be completed to determine if you will fail the asset test at the time of your annual redetermination. You don’t want to wait until you receive the redetermination paperwork to conduct this assessment, as it may be too late to fix the issue. The time to plan is now, as there are several legal strategies that can be deployed to prevent the loss of eligibility.

What Should You Do Now if You Want to Apply for Medi-Cal?

You should conduct a self-assessment to determine if you will fail the asset test before you apply for Medi-Cal. If you are over the asset limit, several legal strategies can be deployed before seeking benefits.

How to Perform a Self-Assessment

To perform a self-assessment, you must take an inventory of all of your assets. Then you must create two columns. Column 1 should be a listing of all of your exempt assets. The value of the assets in Column 1 does not impact Medi-Cal eligibility. Column 2 should be a list of your non-exempt assets. If Column 2 exceeds the limits set forth above, you will be denied Medi-Cal eligibility.

Strategies to Reduce Countable Assets

If your countable assets exceed the 2026 limits, there are numerous legal strategies that might help bring you within eligibility guidelines without triggering penalties, such as:

• Paying medical bills or large personal expenses
• Purchasing exempt assets (like a vehicle if you do not already own one)
• Prepaying certain expenses like mortgages or burial funds
• Making asset transfers that do not violate the look-back rules.

For a deeper dive into Long-Term Care Medi-Cal planning, including practical strategies and explanations of eligibility rules, download our free eBook: Understanding Long Term Care Medi-Cal Planning.

Need More In-Depth Guidance?

Navigating Medi-Cal planning and the asset limit rules can be complex and should be considered carefully within the context of your overall estate plan. You should consult a qualified Elder Law Attorney before acting.

Thanks for reading.
Christopher E. Botti, Esq., Certified Specialist in Estate Planning, Trust and Probate Law.

This blog is for informational purposes only and does not constitute legal advice. Every situation is unique, and you should consult with a qualified attorney for advice regarding your specific circumstances.