On January 1, 2024, California made history by becoming the first state in the nation to fully eliminate its Medi-Cal asset test across all programs. For older adults and people with disabilities, this was a significant shift: for the first time, your savings, home equity (in most cases), or personal property could no longer disqualify you from health coverage. This guide explains what the elimination meant in practice, which programs it affected, and what you need to know about the 2026 reinstatement that reversed part of the change.
What Was the Medi-Cal Asset Test?
Before 2024, Medi-Cal required applicants for certain programs to prove they had few countable assets. Asset tests applied specifically to non-MAGI (non-Modified Adjusted Gross Income) Medi-Cal programs, which cover older adults (age 65 and older), people with disabilities, and individuals needing long-term care. MAGI-based Medi-Cal, which covers most working-age adults and children, has never had an asset test under the Affordable Care Act rules.
Under the old rules, a single applicant for the Aged and Disabled program could hold no more than $2,000 in countable assets, and a couple could hold no more than $3,000. Some assets were always exempt, including a primary residence, one vehicle, household furnishings, and burial funds up to certain limits. But the low cash and savings thresholds meant many low-income seniors and people with disabilities were denied coverage simply because they had modest savings set aside for emergencies or medical bills.
The Two-Phase Path to Elimination
California did not eliminate the asset test overnight. The change happened in two stages:
July 2022: The state dramatically increased the asset limits. The individual limit jumped from $2,000 to $130,000. Couples could hold up to $195,000. This change gave hundreds of thousands of Californians immediate relief and signaled the state's intent to eventually remove asset tests entirely.
January 1, 2024: California received federal approval from the Centers for Medicare and Medicaid Services (CMS) via a State Plan Amendment approved on July 14, 2023. As of January 1, 2024, all asset limits for non-MAGI Medi-Cal programs were fully eliminated. Income became the only financial eligibility factor.
Which Programs Were Affected
The 2024 elimination covered all non-MAGI Medi-Cal programs:
| Program | Who It Covers | Asset Test Before 2024 | After Jan 1, 2024 |
|---|
| Aged and Disabled (A&D) Federal Poverty Level Program | Adults 65+ or with disabilities, income up to 100% FPL | $2,000 individual / $3,000 couple (raised to $130K/$195K in 2022) | Eliminated |
| Medi-Cal with Share of Cost (Medically Needy) | Higher-income seniors/disabled adults with ongoing medical expenses | Same as above | Eliminated |
| 250% Working Disabled Program | Working adults with disabilities, income up to 250% FPL | Same as above | Eliminated |
| Long-Term Care (nursing facility and in-home) | Adults needing institutional or HCBS waiver services | Applied with spousal impoverishment protections | Eliminated |
| Medicare Savings Programs (MSPs) | Low-income Medicare beneficiaries (QMB, SLMB, QI, QDWI) | Federal asset limits applied | Eliminated for CA |
MAGI Medi-Cal, which covers adults under 65 without Medicare, children, pregnant individuals, and the expansion population, was not affected because it has never used an asset test.
SSI recipients: People who receive Medi-Cal through Supplemental Security Income (SSI) were not directly affected by the state elimination. SSI is a federal program with its own $2,000/$3,000 asset limits set by Congress, and those rules remain in place.
What Counts as an "Asset" Under Medi-Cal?
Understanding what the state was (and is) counting helps clarify the real impact of the change.
Countable assets typically include:
- Checking and savings accounts
- Certificates of deposit (CDs)
- Stocks, bonds, and mutual funds
- Cash value in life insurance policies
- Real estate other than the primary home
- Business assets not used in self-employment
Assets that were exempt even before the 2024 elimination and remain exempt under any reinstated rules:
- Primary residence (with conditions)
- One vehicle used for transportation
- Household goods and furnishings
- Term life insurance (no cash value)
- Burial accounts up to certain limits
- Retirement accounts (IRAs and similar accounts had varying treatment)
The Look-Back Period: How It Changed in 2024
Before 2024, Medi-Cal's Long-Term Care program had a 30-month look-back period. This meant the state could review asset transfers made in the 30 months before an application and impose a penalty period if assets were transferred for less than fair market value, potentially delaying coverage.
With the asset test elimination on January 1, 2024, the look-back period became largely obsolete for new transfers. Transfers made on or after January 1, 2024 cannot be used to trigger a penalty period. Transfers made before January 1, 2024 were still subject to the old rules and could affect eligibility until those look-back windows expired, which would phase out completely by mid-2026.
Who Benefited Most
The primary beneficiaries of the 2024 change were:
Low-income older adults: Many seniors had savings above the old $2,000 limit but not enough to pay for healthcare on their own. They were caught in a gap between being "too wealthy" for Medi-Cal and too poor to afford private coverage. The elimination removed that barrier entirely.
People with disabilities: Adults on disability income with modest savings or assets from prior employment frequently failed the old asset test. The change allowed them to maintain some financial cushion without losing Medi-Cal eligibility.
Long-term care applicants: Individuals and families planning for nursing home or in-home care could focus on income-based planning without the complexity of asset spend-down requirements.
Estate planning simplicity: The prior requirement to "spend down" assets to qualify for Long-Term Care Medi-Cal drove complex and sometimes harmful financial decisions. Eliminating the test reduced pressure to transfer assets rapidly or inappropriately.
Income Still Matters: Non-MAGI Medi-Cal Income Limits
The asset test elimination did not change income requirements. To qualify for non-MAGI Medi-Cal programs, applicants still need income at or below specific limits. These are based on the Federal Poverty Level (FPL) and Medi-Cal's established income thresholds.
| Program | Income Limit (2025 estimates) |
|---|
| Aged and Disabled FPL Program | 100% FPL (approximately $1,255/month for an individual in 2025) |
| Medicare Savings Program - QMB | 100% FPL |
| Medicare Savings Program - SLMB | 120% FPL |
| Medicare Savings Program - QI | 135% FPL |
| 250% Working Disabled Program | 250% FPL (approximately $3,138/month for an individual) |
| Medi-Cal with Share of Cost | Above 100% FPL with ongoing medical expenses |
Income counting for these programs uses different rules than MAGI Medi-Cal. Certain income deductions apply, including a standard $20 general income disregard and earned income exclusions for working applicants. Contacting your county social services agency or using the Medi-Cal eligibility screener gives the most accurate individual determination.
The 2026 Reversal: Asset Test Coming Back
The full asset test elimination lasted two years. In the 2024-25 state budget, facing significant budget shortfalls, California decided to reinstate asset limits for non-MAGI Medi-Cal programs effective January 1, 2026.
The reinstated limits are:
| Household Composition | Asset Limit (Effective Jan 1, 2026) |
|---|
| Individual | $130,000 |
| Couple | $195,000 |
| Each additional household member | $65,000 |
| Community spouse (spousal impoverishment protection) | Up to $162,660 (CSRA) |
Key points about the reinstatement:
New applicants: Anyone applying for non-MAGI Medi-Cal on or after January 1, 2026 must report assets. Applications will be evaluated against the new limits.
Current beneficiaries: Those already enrolled will need to report assets at their next annual renewal occurring after January 1, 2026. They will not lose coverage retroactively.
Protected transfers: Assets transferred or spent between January 1, 2024 and December 31, 2025 will not count against applicants during the 2026 reinstatement reviews. The state cannot penalize decisions made during the period when assets were not counted.
MAGI Medi-Cal unaffected: The reinstatement does not add any asset test to MAGI-based programs. Working-age adults, children, pregnant individuals, and the expansion population remain asset-test free.
Younger adults and children: No asset test applies to Medi-Cal expansion categories covering individuals under 65 without Medicare.
Practical Steps If You Are Affected
If you are an older adult or person with disabilities who relies on non-MAGI Medi-Cal, here is what to do before and after January 1, 2026:
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Review your current assets. Check savings, investment accounts, and any real estate you hold beyond your primary home. Compare to the $130,000 individual or $195,000 couple limit.
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Do not panic-transfer assets. Asset transfers made during 2024-2025 are protected. However, rushing to transfer assets in late 2025 could create complications depending on how rules are applied. Consult an elder law attorney before making any moves.
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Update your Medi-Cal renewal accurately. When your renewal comes up in 2026, you will need to provide documentation of your assets. Gather bank statements, account summaries, and any real estate records.
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Check if you still qualify. Many people with modest savings will remain under the $130,000 threshold. The reinstated limit is still dramatically higher than the pre-2022 limit of $2,000.
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Explore additional resources. If you are close to or over the limit, a California elder law attorney or legal aid organization can help you understand options within Medi-Cal's rules.
How to Apply for Medi-Cal
Applying for non-MAGI Medi-Cal works through the same channels as other Medi-Cal coverage:
Step 1: Visit Covered California or BenefitsCal to apply online.
Step 2: Contact your county Department of Social Services (or Health and Human Services). In-person applications are accepted at county offices across California.
Step 3: Call 1-800-541-5555 (DHCS Medi-Cal line) to request an application by mail or get guidance on the process.
Step 4: Gather documentation. For non-MAGI programs you will need: proof of age or disability status, proof of income (Social Security award letters, pay stubs), proof of California residency, and starting January 1, 2026, documentation of countable assets.
Step 5: Submit and follow up. Processing can take up to 45 days for non-MAGI applications. Your county will contact you if additional information is needed.
You can also use the Benefits Navigator screener to check your estimated eligibility for Medi-Cal and other programs before applying.
For more information about California benefits programs, visit the California benefits guide.
Frequently Asked Questions
Did the 2024 asset test elimination affect regular Medi-Cal for adults and children?
No. The 2024 change only affected non-MAGI Medi-Cal programs covering older adults and people with disabilities. Regular MAGI Medi-Cal, which covers most working-age adults, children, and pregnant individuals, has never had an asset test and was not changed.
If I have a house, does that count as an asset for Medi-Cal purposes?
Your primary residence is generally exempt from Medi-Cal's asset counting, even under the 2026 reinstated rules. However, it may be subject to estate recovery after the recipient passes away under certain circumstances. The estate recovery rules for Medi-Cal are separate from eligibility rules.
What happened to the Medi-Cal look-back period after the 2024 elimination?
The look-back period became effectively obsolete for transfers made on or after January 1, 2024, since assets were not counted during that period. Transfers made before that date could still be subject to the old look-back rules on a decreasing basis until they fully phased out. Under the 2026 reinstatement, a new look-back period framework may apply to Long-Term Care applications, and applicants should verify current rules with DHCS or an elder law attorney.
Will I lose my Medi-Cal if the asset limit reinstatement puts me over the new threshold?
Not immediately. Current enrollees will not be disenrolled until their next annual renewal after January 1, 2026. If your assets are over the limit at renewal, you would have an opportunity to review options. Notably, asset transfers made during 2024 and 2025 will not count against you.
Does the asset limit reinstatement affect Medicare Savings Programs?
Yes. Medicare Savings Programs (QMB, SLMB, QI, QDWI) are non-MAGI programs, so the $130,000 individual asset limit will apply to new applicants starting January 1, 2026. Current enrollees face the same renewal-based timeline as other non-MAGI beneficiaries.
Can I still qualify for Medi-Cal if I have a retirement account like an IRA?
The treatment of retirement accounts under Medi-Cal has varied. During the 2024-2025 asset-free period, it did not matter. Under the reinstated 2026 rules, DHCS guidance on how IRAs and similar accounts are treated should be confirmed with your county or a benefits counselor, as rules can differ based on account type and whether distributions are being taken.
Is California the only state that eliminated its Medi-Cal asset test?
California was the first state to fully eliminate its asset test for all Medi-Cal programs, effective January 1, 2024. A few other states have also taken steps to raise or eliminate asset tests for their Medicaid programs, but California led the way with the most comprehensive approach. The 2026 reinstatement is a partial rollback of that leadership position.
