Medi-Cal's Asset Limit Is Back: What California Families Need to Know Before July 2027

For most of 2024 and 2025, California families planning for long-term care had an unusual advantage. Medi-Cal, California's Medicaid program, didn't count savings at all for older adults. Someone with $300,000 in the bank could qualify for nursing home coverage on income alone.

That window has closed. Starting January 1, 2026, Medi-Cal again counts assets for many of the people most likely to need long-term care. A second, much steeper change takes effect on July 1, 2027. If you have a parent in a California nursing home, or you're planning for your own care, here's what changed and what to do about it.

Who the asset limit applies to

According to the Department of Health Care Services (DHCS), the asset rules apply when you apply for Medi-Cal or renew your coverage if you:

• are 65 or older,
• have a physical, mental or developmental disability,
• live in a nursing home, or
• are in a family whose income is too high to qualify under federal tax rules.

Income rules haven't changed. The asset test is an added hurdle, not a replacement.

The limits, in two stages

Through June 30, 2027: the limit is $130,000 for one person, plus $65,000 for each additional person in the household (up to 10 people). For a couple, that's $195,000.

Starting July 1, 2027: the limit drops to $21,000 for one person and $31,000 for two people, plus $1,550 for each additional person.

The first stage is generous. The second isn't. Someone who qualifies comfortably in 2026 with $100,000 in savings could be over the limit at their first renewal after July 1, 2027.

What counts and what doesn't

DHCS lists these as countable assets:

• bank accounts,
• cash, and
• a second home or additional vehicles.

These don't count:

• the home you live in,
• one vehicle,
• household items, and
• some savings, such as retirement accounts.

Married couples get added protection when one spouse needs nursing home care and the other stays home. Federal spousal impoverishment rules let the at-home spouse keep a larger share of the couple's assets. Those rules are complex, so get advice before moving money.

Why July 1, 2027 is the date to plan around

I tell families to treat the next 20 months as a planning window, not a safe harbor. Three things to keep in mind:

1. Renewals bring the new limit to you. If you're already on Medi-Cal, the lower limit applies at your first renewal on or after July 1, 2027. You don't have to reapply for it to affect you.
2. Spending down takes time to do well. Paying off a mortgage, repairing the home, prepaying funeral expenses or buying a car the family needs are common, allowable ways to reduce countable assets. They work best when they're planned, not rushed.
3. Gifts can backfire. Giving money to children to get under the limit can trigger Medicaid transfer penalties. Talk to an elder law attorney before you transfer anything.

Where long-term care insurance fits

For many California families, the bigger question is how to avoid needing Medi-Cal in the first place. A long-term care insurance policy, or a hybrid life policy with a long-term care benefit, pays for care directly. That keeps savings intact and preserves choice of facility or home care.

California is one of the original Long-Term Care Partnership states, but DHCS says no Partnership-approved insurers are currently selling new policies there, and California doesn't take part in Partnership reciprocity. Traditional and hybrid policies are still available, and underwriting is easier the younger and healthier you are when you apply.

The bottom line

• Medi-Cal counts assets again as of January 1, 2026.
• The limit is $130,000 for one person through June 30, 2027.
• It drops to $21,000 for one person on July 1, 2027.
• Your home, one car, household items and some retirement savings don't count.
• Plan now, especially if a renewal will fall after July 1, 2027.

If you'd like to see what private coverage would cost compared with spending down to qualify, request a free quote comparison. For a full overview of nursing home and home care coverage in California, see our California Medi-Cal long-term care guide.