2026 Medi-Cal Asset Rule Reinstatement: What You Need to Know

Last Updated: October 25, 2026

Important Update: California reinstated Medi-Cal asset limits on January 1, 2026. The state's 2026–27 budget subsequently established substantially lower asset limits scheduled to take effect July 1, 2027, subject to implementation requirements.

This article has been extensively revised to explain the current limits, the scheduled 2027 changes, potential effects on eligibility, and important considerations for individuals and families planning for long-term care.

2026–2027 Medi-Cal Asset Limits: Key Takeaways

• Right now (since January 1, 2026): Seniors, people with disabilities, and nursing home residents applying for non-MAGI Medi-Cal must have countable assets of $130,000 or less (individual).
• Scheduled for July 1, 2027: That limit drops to $21,000 for an individual and $31,000 for a couple, subject to implementation by the state.
• Your home and one car are still exempt. Bank accounts, investments, second properties, and some retirement accounts count.
• Current members are reviewed under their program's rules. Assets are generally checked at application and renewal, and your eligibility will be assessed under the rules that apply to your program and your renewal.
• Don't rush to give money away. Gifts can trigger a penalty period under Medi-Cal's 30-month look-back rule.
• The numbers could still change. Lawmakers have said they will revisit the limit in next year's budget.

How We Got Here: A Short Timeline

Date	Individual asset limit	What happened
Before July 2022	$2,000 ($3,000 couple)	Long-standing limit
July 1, 2022	$130,000	California raised the limit as the first step toward elimination
January 1, 2024	No limit	Asset test eliminated for most non-MAGI applicants
January 1, 2026	$130,000	Asset test reinstated (AB 116; DHCS ACWDL 26-02)
July 1, 2027 (scheduled)	$21,000	Limit lowered in the June 2026 state budget

The $21,000 figure was a compromise. The Governor proposed returning to the old $2,000 limit; the Legislature rejected that and settled on $21,000. The state has not published an estimate of how many Californians will lose coverage under the new limit.

Current Limits vs. 2027 Limits

Household	Current limit (2026)	Scheduled for July 1, 2027
Individual	$130,000	$21,000
Couple	$195,000	$31,000
Each additional household member (up to 10)	+$65,000	+$1,550

For a more detailed explanation of countable resources, exempt property, and eligibility requirements, review our California Medi-Cal Asset Limits guide

For a single person, that's a reduction of $109,000, roughly 84%.

Married with one spouse in a nursing home? Different rules apply. Under California's spousal impoverishment protections, the spouse in the nursing home can keep up to $130,000 in their own name, and the spouse living at home (the "community spouse") can keep a separate Community Spouse Resource Allowance of $162,660 for 2026. The allowance is set when eligibility is first determined, and couples then have a transfer period of about 90 days after approval to move excess assets into the community spouse's name. For many couples in this situation, these spousal rules matter more than the couple limit above. DHCS has not yet explained how they will interact with the 2027 limit. See an elder law attorney before assuming you are over the limit.

Note: People who receive Medi-Cal through SSI remain subject to the federal SSI limits ($2,000 individual / $3,000 couple), which were never affected by these changes.

Who Is Affected?

The asset test applies only to non-MAGI Medi-Cal, which generally covers:

• Adults 65 and older
• People who are blind or have a disability
• Nursing home residents and others applying for long-term care coverage

It does not apply to MAGI Medi-Cal (most children, pregnant people, and working-age adults), which has no asset test.

Three non-MAGI programs also remain exempt from the asset test for now, because their asset limits were eliminated under a separate federal waiver: the Pickle, Disabled Adult Child (DAC), and Disabled Widow/er (DW) programs.

When Will the $21,000 Limit Affect Me?

If you are applying for Medi-Cal for the first time: Your assets are reviewed as part of your application, generally under the limit in effect for the months you are requesting coverage. If you may need long-term care soon, ask an elder law attorney how the timing of your application could affect the result.

If you already have Medi-Cal: Assets are generally reviewed at your renewal (redetermination). Your eligibility will be assessed under the rules that apply to your program and your renewal, so the timing and outcome will vary from person to person. Watch for renewal packets and notices from your county, and respond by the deadline.

Is July 1, 2027 final? The Department of Health Care Services (DHCS) currently lists July 1, 2027 as the date the new limit takes effect. The change depends on the state completing implementation, and lawmakers have said they may revisit the limit in next year's budget, so the date or amount could still change. We will update this article if it does.

Which Assets Count Toward Medi-Cal Eligibility?

Exempt (does not count toward the limit):

• Your primary residence, if you or your spouse live there (or intend to return)
• One vehicle
• Household goods and personal belongings
• Reasonable jewelry, such as wedding rings
• Retirement accounts in payout status (you are receiving regular periodic payments)

Countable:

• Cash, checking, and savings accounts
• Stocks, bonds, mutual funds, and brokerage accounts
• Real estate other than your home (rentals, vacation homes, land)
• Second and additional vehicles
• The cash value of certain life insurance policies
• Some business interests

The Retirement Account Question

This is the issue we expect to affect the most families. Under current guidance, an IRA or 401(k) is excluded only if you are receiving regular payments from it. An untouched retirement account may count in full. At a $130,000 limit, that rarely mattered. At $21,000, a single IRA can put you over the limit.

DHCS has not yet issued detailed guidance on how non-paying retirement accounts will be treated under the 2027 limit. If you have retirement savings, talk to an attorney about whether putting an account into payout status makes sense for you.

The 30-Month Look-Back: Why Giving Money Away Can Backfire

It's natural to think, "I'll just give my savings to my children before 2027." Be careful.

When you apply for long-term care Medi-Cal, the county looks back for gifts and transfers made for less than fair market value. If it finds a disqualifying transfer, it imposes a penalty period: months during which Medi-Cal will not pay for your nursing home care. You keep your other Medi-Cal coverage during the penalty.

How the Look-Back Works Now

• Transfers made in 2024 and 2025 are not penalized. Because there was no asset test during those two years, DHCS has told counties not to review or penalize any transfers made from January 1, 2024, through December 31, 2025.
• The look-back window is growing. For applications filed since July 1, 2026, counties review only the months since January 2026. The window grows by one month each month until it reaches the full 30 months for applications filed on or after July 1, 2028. For example, an application filed in July 2027 is reviewed for transfers from January 2026 through June 2027 (18 months).
• Being over the limit matters. Under DHCS guidance to counties, a gift is reviewed as a potentially disqualifying transfer when the person was over the asset limit at the time of the transfer. Transfers of exempt assets, such as your home in many cases, are generally not penalized. Do not assume any particular dollar amount is safe to give away.
• How the penalty is calculated. The amount transferred is divided by the statewide average monthly private-pay rate for nursing facility care, which DHCS updates each year ($14,440 for 2026). Partial months are not counted, and the penalty cannot exceed 30 months.
• There are defenses. You can show that a gift was made for a reason other than qualifying for Medi-Cal, and counties must consider undue hardship before imposing any penalty. DHCS must approve every penalty period.

Why this matters for 2027: A gift you make while you are over the limit can be penalized if it falls inside your look-back window, and that window keeps growing through mid-2028. Once the lower limit takes effect, far more people will be over the limit when they make a gift. Get advice before moving money.

Safer Ways to Reduce Countable Assets

Some spend-down strategies don't trigger a penalty because you receive fair value or convert cash into an exempt asset:

• Paying off debts, including a mortgage on your home
• Home repairs, modifications, or improvements
• Replacing an older vehicle
• Prepaying funeral and burial expenses through an irrevocable arrangement
• Purchasing items you need for medical care or daily living

The right strategy depends on your situation. A transfer that seems harmless can cause a long penalty period.

Common Mistakes When Trying to Qualify for Medi-Cal

• Giving money to family to get under the limit. Gifts made while you are over the limit can trigger a penalty period for nursing home coverage, and the look-back window keeps growing through mid-2028.
• Overlooking retirement accounts. An IRA or 401(k) that is not paying out may count toward the limit. At $21,000, a single account can make you ineligible.
• Spending down on the wrong things. Paying off debts or buying exempt assets is very different from transferring cash for less than fair value. Keep receipts and records for every large expense.
• Not using the spousal protections. Married couples sometimes assume they must spend down everything, when the at-home spouse may be able to keep substantially more.
• Ignoring renewal notices. Missing a deadline or failing to return requested documents can end coverage even when you are otherwise eligible.
• Relying on outdated information. The rules have changed three times since 2022, and many online guides still list old limits. Confirm current figures with DHCS or an elder law attorney.

Don't Forget Estate Recovery

Even when your home is exempt for eligibility, California may seek reimbursement from your estate after your death for certain Medi-Cal costs, including long-term care. As the cash limit drops, more families will hold most of their wealth in the family home, which makes estate recovery planning more important.

Understanding how California's estate recovery rules work is an important part of protecting your family's financial future. Learn more in our guide to avoiding Medi-Cal estate recovery

What Medi-Cal Rules Could Still Change Before 2027?

We'll update this article as DHCS issues guidance. Open questions include:

1. Whether the July 1, 2027 date holds, since the change depends on the state completing implementation.
2. Whether the limit will change again. Lawmakers have said they will revisit it in the 2027-28 budget.
3. How non-paying retirement accounts will be treated.
4. How the spousal impoverishment rules will interact with the 2027 limit.
5. How many people will lose coverage. The state has not released an estimate.

What You Should Do Now

1. Take inventory. List every asset and note whether it's exempt or countable, including retirement accounts and life insurance cash values.
2. Find your renewal date. It determines when the new limit will first apply to you.
3. Don't make large gifts without advice. A rushed transfer can cost you months of nursing home coverage.
4. Consider timing. If long-term care may be needed soon, applying while the $130,000 limit is in effect could matter.
5. Plan for the at-home spouse. If you're married, make sure the community spouse's protections are being used.
6. Talk to an elder law attorney about exempt-asset spend-down, retirement account options, trusts, and estate recovery.

If you're beginning to research your options for long-term care, visit our free California Medi-Cal Planning Guide page for additional information and to request notification when the updated guide is available.

2026 Medi-Cal Asset Rules Questions & Answers