Medi-Cal planning in California is changing (again). Just two years after eliminating the asset limit entirely, the State of California has reinstated it, effective January 1, 2026. For many individuals currently receiving Medi-Cal benefits and for families planning ahead for long-term care or disability support, this shift is significant.
From 2024 through 2025, Californians were able to qualify for Medi-Cal without worrying about how much they had saved. The removal of the asset test simplified the application process, reduced administrative burdens, and allowed seniors and individuals with disabilities to maintain financial stability without being forced to “spend down” their life savings.
Beginning in 2026 however, the asset limit will return at $130,000 per individual. While this is far more generous than the historic $2,000 cap that existed for decades (and still applies in just about every other state in the country), it marks a substantial change from having no asset limit at all.
In this post, we’ll walk through how we got here, what the 2026 Medi-Cal asset rules will require, how income limits and share of cost still apply, and most importantly, what planning strategies are available to help you remain eligible while protecting your financial future.
The History of Medi-Cal Asset Limits
To understand why the 2026 changes matter, it helps to understand where we’ve been.
For decades, Medi-Cal imposed one of the strictest asset limits in the country. An individual could own no more than $2,000 in countable assets and still qualify for coverage. For married couples, the limit was only $3,000.
For families caring for a loved one with a disability, this created a nearly impossible situation.
Parents were often told their adult child could not have more than $2,000 in savings. Seniors needing long-term care were required to spend down nearly everything before qualifying. Families were forced to choose between financial stability and access to medical care.
This system discouraged saving, punished financial responsibility, and created enormous stress for families already navigating disability, aging, or chronic illness.
The Turning Point: AB 133
In 2021, California passed AB 133, beginning a phased reform of the asset test.
- July 1, 2022: The asset limit increased to $130,000 per individual.
- January 1, 2024: The asset limit was eliminated entirely.
This was a historic shift. When the limit increased to $130,000, the Department of Health Care Services estimated that approximately 12,000 additional Californians became eligible for Medi-Cal. When the asset test was eliminated altogether, roughly 30,000 more individuals qualified.
For families of children and adults with disabilities, this change meant:
- No more rushing to spend down savings
- No more fear that a modest inheritance would destroy eligibility
- A far simpler application process
- The ability to maintain emergency savings
For families caring for loved ones with disabilities, this shift provided breathing room. It allowed for more thoughtful planning and reduced the fear that a modest inheritance, settlement, or savings account could unintentionally jeopardize critical healthcare benefits.
As with many public programs, Medi-Cal continues to evolve in response to budget considerations, enrollment numbers, and statewide priorities. Beginning in 2026, the asset limit has returned, creating a new planning landscape that families will need to navigate carefully.
The 2026 Reinstatement of the Medi-Cal Asset Limit
Beginning January 1, 2026, California has reinstated an asset limit for Medi-Cal eligibility.
Under the new rules:
- An individual may have up to $130,000 in countable assets – for dependents in the household, add $65,000 per dependent
- Married couples may have a higher combined limit (based on individual allowances)
- Applicants must be under the asset limit at the time of application
- Current recipients must be under the limit at their annual eligibility redetermination
While the $130,000 limit is significantly more flexible than the historical $2,000 cap, it is still a meaningful eligibility requirement. For individuals who have accumulated savings, received an inheritance, or held funds in reserve during the years when no asset test existed, this change may require proactive planning.
What This Means for New Applicants
If you apply for Medi-Cal on or after January 1, 2026, you will need to demonstrate that your countable assets are below $130,000. This means documentation of bank accounts, investment accounts, and other countable resources will once again become part of the application process.
For families planning ahead – particularly those anticipating long-term care needs or supporting an adult child with a disability – it will be important to evaluate asset levels well before applying.
What This Means for Current Recipients
If you are already receiving Medi-Cal, eligibility will be reviewed during your annual redetermination process, which typically occurs once per year. By the time of that review, assets will need to fall below the $130,000 limit.
This creates an important planning window. Many people who grew their savings or other countable assets during last couple of years now need to evaluate whether adjustments are necessary before their next review cycle.
The key takeaway is not panic, but preparation. With advance planning, there are thoughtful and compliant ways to restructure assets, preserve benefits, and maintain financial stability.
What Counts Toward the $130,000 Asset Limit (and What Does Not)?
With the asset limit returning in 2026, one of the most important questions families will need answered is: what actually counts?
Not all property and savings are treated the same under Medi-Cal rules. Understanding the distinction between countable and exempt assets is critical to planning properly.
Countable Assets
Countable assets are resources that Medi-Cal considers available to you and therefore subject to the $130,000 limit.
These may include:
- Checking and savings accounts
- Certificates of deposit (CDs)
- Brokerage and non-retirement investment accounts
- Cash on hand
- Second homes or vacation properties
- A second vehicle
- Certain revocable trusts
- Lump sum settlements that have not been properly structured
For families caring for a loved one with a disability, common concerns include:
- An inheritance left outright to a beneficiary
- Savings accumulated during the years when no asset limit existed
- Funds held in a joint account with a parent
- Settlement proceeds from a personal injury case
These assets may be fully countable unless properly planned for.
Exempt (Non-Countable) Assets
Some assets are not counted toward the $130,000 limit. These are often referred to as “exempt” resources.
Common exempt assets include:
- Your primary residence (subject to equity limits and intent to return home rules)
- One vehicle
- Personal belongings and household items
- Certain retirement accounts (depending on distribution status)
- Tools or property necessary for employment
- Irrevocable burial arrangements
For many families, the primary home is the most significant exempt asset. However, even though a home may be exempt during lifetime eligibility, it may still be subject to estate recovery after death, which is an entirely separate planning consideration.
A Special Consideration for Families of Individuals with Disabilities
Parents of adult children with disabilities often assume that because the asset limit was eliminated in 2024, they no longer need to worry about how assets are titled or transferred.
Beginning in 2026, that assumption may create risk.
If an adult child receiving Medi-Cal receives assets outright – whether through inheritance, a gift, or joint ownership – those funds could push them above the $130,000 limit at redetermination.
This is one of the primary reasons why special needs planning remains essential, even during periods when asset rules fluctuate.
The goal is not simply eligibility today; it is stability long term.
Income Limits and Share of Cost in 2026
While the asset limit is returning in 2026, the income rules have not changed.
For many families, income – not assets – continues to be the most restrictive part of Medi-Cal eligibility.
The Income Threshold
For a single individual, full-scope Medi-Cal is generally available if monthly income is approximately $1,800 or less.
If income exceeds that amount, the individual may still qualify for Medi-Cal, but they will likely be placed into what is known as Share of Cost.
What Is Share of Cost?
Share of Cost (SOC) is often compared to a deductible, but it is not capped like a traditional insurance deductible. It resets each month.
Under current rules:
- The first $600 of monthly income is protected for basic living expenses.
- Income above that amount may be applied toward Share of Cost.
In practical terms, this means that if someone earns even modestly above the threshold, they could be required to pay a significant portion of their income toward medical expenses before Medi-Cal begins covering costs.
Planning Strategies to Consider Before Redetermination
If you are currently receiving Medi-Cal and have assets above $130,000 – or if your income puts you near Share of Cost levels – the months leading up to your redetermination are an important planning window.
Below are strategies families may wish to explore and discuss with experienced counsel:
1. Strategic Spend-Down of Countable Assets
Spending down does not mean wasting money.
In many cases, families can convert countable assets into exempt assets or use funds in ways that strengthen long-term stability, such as:
- Paying off mortgage or debt
- Making home accessibility modifications
- Purchasing or replacing a vehicle
- Prepaying burial arrangements
- Addressing deferred medical or dental care
Thoughtful spend-down can improve quality of life while preserving eligibility.
2. Asset Repositioning
In some cases, it may be appropriate to:
- Reallocate savings
- Adjust account ownership
- Transfer assets into properly structured vehicles
The structure and timing of these changes matter significantly, especially where other public benefits are involved.
3. Special Needs Trust Planning
For individuals with disabilities, a properly structured special needs trust may allow assets to be held for their benefit without disqualifying them from Medi-Cal or SSI.
This can be particularly important if:
- An inheritance is anticipated
- A settlement has been received
- Savings accumulated during the no-asset-limit period now exceed $130,000
The type of trust, funding source, and administration must align with both Medi-Cal and SSI regulations.
4. Income Structuring
Where income is the issue, families may wish to explore:
- Adjusting how certain income is received
- Evaluating retirement account distributions
- Reviewing support arrangements
- Understanding whether specific income streams are treated as countable
Because Share of Cost resets monthly and has no cap, small structural adjustments can sometimes have significant impact.
5. Early Review (Not Last-Minute Action)
Perhaps most importantly, planning should occur before redetermination notices arrive. Annual eligibility reviews are not new, but the reinstated asset limit means those reviews will once again include asset verification.
Waiting until documentation is requested can limit options; early review provides flexibility.
How Special Needs Trusts Fit Into Medi-Cal Planning in 2026
With the return of the $130,000 asset limit, special needs trusts once again become central to long-term Medi-Cal planning.
Even during the brief period when the asset test was eliminated, special needs trusts remained valuable tools. Beginning in 2026, they are once again becoming essential for many families.
Why a Special Needs Trust Still Matters
For individuals with disabilities who rely on Medi-Cal – whether for healthcare, IHSS, therapies, or long-term services and supports – eligibility stability is critical.
If an adult with a disability:
- Receives an inheritance outright
- Is added to a joint bank account
- Receives a legal settlement
- Accumulates savings above $130,000
They could exceed the asset limit at redetermination and risk losing coverage.
A properly structured special needs trust allows assets to be held for the benefit of the individual without being treated as owned by them for eligibility purposes. This distinction is what preserves benefits.
Protecting Eligibility Without Creating Poverty
One of the greatest misconceptions about public benefits planning is that families must leave their loved one with “nothing.” That is not the goal.
The goal is to preserve eligibility for essential medical coverage while allowing additional resources to enhance quality of life.
A special needs trust can pay for:
- Education and training
- Travel and recreation
- Assistive technology
- Therapies not covered by Medi-Cal
- Home modifications
- Care coordination
- Personal services that improve independence
Rather than forcing families to choose between public benefits and financial support, proper trust planning allows both to coexist.
Stability Is the Real Goal
Medi-Cal rules will continue to evolve. Income limits may change. Asset thresholds may be adjusted again in the future.
A well-drafted special needs trust provides stability across those changes. Rather than reacting each time the rules shift, families who have implemented comprehensive planning are better positioned to adapt without disruption to care.
For families caring for a loved one with a disability, that stability is often the most important benefit of all.
We Are Here to Help
If you or a loved one:
- Are currently receiving Medi-Cal
- Expect to apply in 2026
- Have accumulated assets during the no-limit period
- Receive SSI or SSDI
- Or are concerned about preserving benefits while protecting savings
Now is the time to review your plan.
Medi-Cal planning is not just about meeting eligibility thresholds. It is about protecting access to healthcare, preserving dignity, and creating long-term security for families navigating disability or aging.
If you would like help creating or updating an estate plan that preserves public benefits while protecting your assets, we invite you to contact our office through the link below. We are here to guide you through the 2026 changes with clarity and care.
