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Elder Law Alert: Medi-Cal Asset Limit Is Returning in 2026

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Medi-Cal asset limit

A quiet but important change is about to affect Medi-Cal eligibility in California. Beginning January 1, 2026, the state will reinstate asset limits for non-MAGI Medi-Cal programs, including long-term care coverage.

If you are age 65 or older and may need skilled nursing care in the future, this shift could have serious financial consequences.

For the past several years, California waived its asset test. That temporary flexibility is now ending. Medi-Cal applicants will once again have to demonstrate that their available assets fall below a specific threshold.

If your estate plan was built under the assumption that there is no Medi-Cal asset limit, it is time to revisit that plan with an elder law attorney.

What the 2026 Asset Test Requires

As of January 1, 2026, individuals applying for non-MAGI Medi-Cal must fall within these limits:

  • $130,000 in countable assets for a single applicant
  • $195,000 for married couples
  • An additional $65,000 is allowed for each additional family member

These caps apply to applicants who are age 65 or older, blind, disabled, or in need of long-term care services. Unlike the income-based Medi-Cal programs offered through Covered California, these long-term care programs will once again evaluate your savings and property.

Which Assets Count Toward the Limit

The asset test evaluates your total holdings minus only certain exempt categories. Medi-Cal will count checking and savings accounts, brokerage accounts, second vehicles, investment properties, and most forms of cash or liquid assets.

Your primary residence will be excluded at first, but only under specific conditions. If you are unmarried and no dependent or spouse remains in the home, it could become a countable resource.

Long-Term Care Costs Remain the Greatest Risk

In Sonoma County, the cost of care continues to rise. The median cost for a private room in a skilled nursing facility is just over $200,000 annually, according to Genworth Financial.

Medicare does not pay for long-term custodial care. It may cover short-term rehabilitation after hospitalization, but it does not help with the ongoing support most seniors eventually require.

Medi-Cal remains the only public program that covers nursing home care, and access to it will now require compliance with strict asset limits.

The Role of a Medi-Cal Trust

With the return of the asset test, proactive planning becomes essential. One of the most powerful tools available is the irrevocable income-only Medi-Cal trust. This type of trust allows you to remove assets from your countable estate while still receiving income during your lifetime.

When structured and funded properly, an income-only trust protects the principal from Medi-Cal’s asset calculation. That means your home, savings, or investment property can be preserved for your heirs while you remain eligible for care coverage.

The trust must be truly irrevocable and must follow specific legal requirements. It is not a form you can print online. It must be drafted as part of a coordinated legal plan.

Estate Recovery Still Applies

Even if you qualify for Medi-Cal, your estate could still be subject to recovery after your death. That means the state may seek repayment from your assets, including your home, unless they are protected in advance.

A properly designed Medi-Cal trust can also shield assets from estate recovery, allowing you to preserve wealth for your children or grandchildren.

Many Californians assume that estate recovery no longer applies or will not affect them. In reality, estate recovery remains an active program.

If your estate includes real property or significant holdings outside of a trust, it may be subject to claims by the state, even if you qualified for Medi-Cal during your life.

Now Is the Time to Prepare!

We can help you create a comprehensive plan that prepares you for this eventuality. To get started, send us a message or call our Petaluma, CA estate planning office at 707-769-9975.

 

 

Bridget Mackay
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