If you have an aging parent, or you’re planning ahead for your own long-term care, you’ve probably heard that Medi-Cal can help pay for nursing home care. What you may not know is how dramatically the rules around who qualifies have changed in the last few years – and why those changes matter so much for California families right now.
This guide explains what Medi-Cal’s asset limits actually are in 2026, what changed to get here, and what it means for protecting your family’s home, savings, and peace of mind.
What Medi-Cal Actually Covers
Medi-Cal is California’s Medicaid program, and for long-term care planning purposes, the piece that matters most is Long-Term Care Medi-Cal. This program can pay for nursing home care, which costs well into six figures a year in California, and Medicare or private insurance rarely covers it in full.. You can find the program’s official rules and updates on the California Department of Health Care Services website.
Because the cost of long-term care is so high, many families eventually need Medi-Cal to help cover it. But Medi-Cal is a needs-based program, which means the applicant has to meet strict financial requirements before benefits kick in.
The Big Change: California Eliminated the Asset Limit
Here’s the headline most people haven’t caught up on yet: as of January 1, 2024, California eliminated the asset limit for most Medi-Cal programs, including Long-Term Care Medi-Cal.
Before this change, an individual applying for Medi-Cal could only have around $2,000 in countable assets, and a married couple could only have around $130,000, depending on the program. Families had to “spend down” anything above that threshold before benefits could begin, which forced many of them into rushed, poorly planned decisions.
California no longer applies that asset test. An applicant’s savings, investments, and additional real estate no longer disqualify them from receiving Medi-Cal, regardless of how much they have. The Department of Health Care Services’ official announcement on the asset limit elimination outlines exactly which programs were affected and when the change took effect.
So Does That Mean You Don’t Need to Plan Anymore?
This is where families get the wrong idea, and it’s an expensive mistake. Removing the asset limit does not mean Medi-Cal planning is unnecessary. It means the planning has shifted to a different set of rules that are just as important, and in some ways more urgent.
Three things still apply in full force, even with no asset limit:
Income limits still exist. Medi-Cal still looks closely at monthly income, and in most cases requires a “share of cost”, essentially the portion of the applicant’s income that must go toward their care before Medi-Cal pays the rest. For many people receiving Social Security and a modest pension, this share of cost can be significant.
The five-year lookback is still active. California still reviews financial transfers made in the 60 months before an application for certain circumstances, and gifting assets improperly can still trigger a penalty period during which Medi-Cal won’t pay for care. Removing the asset limit did not remove the lookback.
Medi-Cal Estate Recovery still applies. After a Medi-Cal recipient passes away, the state can seek reimbursement from their estate for the cost of care it provided, and for most people, the home is the single largest asset at stake. Without proper planning, your family’s home can be subject to a claim from the state after your loved one passes. We explain how this connects to the probate process itself in our guide on how much probate costs in California in 2026.
Why the Home Is Still the Center of the Conversation
For most California families, the family home is the single biggest financial vulnerability in a Medi-Cal situation, and this hasn’t changed with the new rules. Even though owning a home no longer disqualifies someone from Medi-Cal eligibility, the state can still recover the cost of care from that home’s value after death, through a probate estate.
This is the piece that catches families off guard. They hear “no more asset limit” and assume nothing can touch the home. That’s not automatic. Estate recovery risk to the home depends heavily on how it’s titled, who inherits it, and whether it passes through probate at all.
A properly structured trust can take a home out of the probate estate, which is one of the primary tools available to protect it from a Medi-Cal estate recovery claim. Without that structure in place, a family can do everything right on the eligibility side and still lose the home after their parent passes away. If you’re not yet sure how a trust fits into the bigger picture, our guide on trust vs. will in California walks through how each document works and why most complete plans use both. And because a trust only protects what’s actually inside it, it’s worth reviewing our guide on asset transfer and trust funding as well.
What Changed, In Plain Terms
- Asset limits – Eliminated as of January 1, 2024, for most Medi-Cal programs, including Long-Term Care Medi-Cal.
- Income limits – Still apply, and the share of cost is still calculated based on the applicant’s monthly income.
- The five-year lookback – Still in effect for reviewing certain transfers before an application.
- Estate recovery – Still in effect, and the home remains the most common asset the state seeks to recover against.
- Planning priorities – Have shifted away from “spending down” assets and toward income planning, trust structuring, and protecting the home from probate and estate recovery.
Why Families Still Need a Plan, Even Without an Asset Limit
Because the asset limit is gone, some families assume there’s nothing left to plan for. In practice, the opposite is often true. Without the asset test acting as a forcing function, many families delay planning until a health crisis is already underway, which is exactly when there is the least time and the fewest options.
Getting ahead of this means addressing a few key questions before a health crisis:
- Is the family home protected from a future estate recovery claim?
- Is there a plan in place for managing income and share of cost if long-term care becomes necessary?
- Does the family have the legal authority in place – a financial power of attorney and a trust – to act quickly if a parent becomes incapacitated?
- Has a trust been properly funded, so it actually keeps the home and other assets out of probate?
These questions matter regardless of whether Medi-Cal ends up being part of the picture, because they’re the same questions that come up in a complete California estate plan built around a revocable living trust.
Start With a Conversation
Medi-Cal’s rules are more forgiving than they used to be, but that’s exactly why families need a clear-eyed plan rather than a false sense of security. I’m Jolene Blackbourn, a California estate planning attorney, and I work with families across La Crescenta, Montrose, Tujunga, Sunland, and Los Angeles County to put the right plan in place – simply, affordably, and entirely virtually.
The best first step is a conversation. We’ll talk through your family’s situation, your home, and your goals, and I’ll help you understand exactly what you need and why.
[Schedule Your FREE 30-Minute Consultation]
Frequently Asked Questions
Did California really remove the Medi-Cal asset limit? Yes. As of January 1, 2024, California eliminated the asset limit for most Medi-Cal programs, including Long-Term Care Medi-Cal. Applicants are no longer disqualified based on how much they own in savings, investments, or additional property.
If there’s no asset limit, why do I still need estate planning? Because income limits, the five-year lookback on transfers, and Medi-Cal Estate Recovery are all still in effect. Estate recovery in particular can still reach the family home after a Medi-Cal recipient passes away, which is why proper trust planning still matters.
Can Medi-Cal take my house after I die? It can, through a claim against your probate estate, if the house is not properly protected. Whether this happens depends on how the home is titled and whether it’s part of a properly funded trust that avoids probate.
What is Medi-Cal’s five-year lookback? It’s the period California reviews to check certain financial transfers made before a Medi-Cal application. Improperly gifting assets during this window can still result in a penalty period, even though the asset limit itself has been removed.
Does having a trust affect my Medi-Cal eligibility? A revocable living trust generally does not remove assets from Medi-Cal’s consideration during your lifetime, since you retain control over the trust. Its main value is protecting your home and other assets from probate and estate recovery after you pass away, and providing incapacity protection if you need care before then.
What is the Medi-Cal share of cost? It’s the portion of a Medi-Cal recipient’s monthly income that must go toward the cost of their care before Medi-Cal covers the remainder. It’s calculated based on income, not assets, and still applies even though the asset limit has been eliminated.
