For two years, the correct answer to “how much can I own and still qualify for Medi-Cal?” was: it does not matter. California eliminated the asset test for its aged, disabled, and long-term care categories in January 2024, and from that day through the end of 2025, eligibility for those programs turned on income alone.
That answer is now wrong. As of January 1, 2026, the asset limit is back: $130,000 in countable assets for one person, plus $65,000 for each additional member of the household, which puts a typical married couple at $195,000. The advice, articles, and well-meaning family lore produced during the no-limit years are still circulating, and following them in 2026 can cost someone their coverage.
Here is what changed, who it touches, and, just as important, what the new rules do not do.
What changed on January 1, 2026
The 2021 state budget legislation phased the old asset test out: the limit jumped from $2,000 to $130,000 in July 2022, then disappeared entirely in January 2024. The June 2025 budget agreement reversed course. Citing costs, the Legislature reinstated the limit at the 2022 levels, effective January 1, 2026, and the Department of Health Care Services issued its implementing county letter, ACWDL 25-14, on June 30, 2025.
The mechanics are the ones older families will remember. Countable assets are measured against the limit; being over it means ineligibility for the affected programs. DHCS mailed outreach notices to affected members in fall 2025 and maintains a plain-language explanation at dhcs.ca.gov/asset. The rules for what counts and what is exempt are the pre-2024 rules, restored intact.
Who this applies to, and who it does not
The reinstated limit applies to what the program calls non-MAGI Medi-Cal: the eligibility categories serving adults 65 and older, people with disabilities, and people receiving long-term care, including nursing facility residents. If you or the person you help care for is in one of those groups, the asset test is back for you.
It does not apply to everyone on Medi-Cal. Adults and children who qualify through the income-based expansion categories have no asset test; that was true before 2024 and remains true now. People whose Medi-Cal is linked to SSI stay under the separate SSI resource rules, which have always had their own much lower limit. The change lands almost entirely on seniors and people with disabilities, the same population most likely to be relying on advice from the no-limit window.
What counts, and what stays exempt
The restored exemption rules matter as much as the number. The home you live in is exempt for eligibility purposes, along with one vehicle, household goods, personal belongings, and retirement accounts that are in payout status, although the distributions from those accounts count as income.
What counts: cash, checking and savings accounts, brokerage accounts, certificates of deposit, additional vehicles, and real property you do not live in, such as a rental or a second home. And a point families are often surprised by: assets inside a revocable living trust count as your assets, because you can revoke the trust and take them back at any time. A revocable trust is a probate-avoidance tool, not an eligibility tool. The state’s list of countable and exempt property lives in its MC 007 publication, and close calls belong with an elder law attorney.
When you actually have to prove it
The rollout has a built-in grace rhythm that the headlines mostly skipped. New applications filed on or after January 1, 2026 must report assets from the start. Current members report at their first annual renewal that falls in 2026, on the county’s ordinary schedule, so a member whose renewal month is December does not owe asset information until December 2026.
Renewal and application packets now include an asset form, MC 604 IPS, asking for statements and documentation. Members who cannot easily obtain proof of a small asset’s value are generally permitted to self-attest to it in writing. Nobody lost coverage on New Year’s Day; the renewal packet is where this change becomes real, one household at a time, across the whole of 2026.
The look-back: read it before you fear it
The part generating the most anxiety is the return of transfer penalties, and it is also the part where the actual guidance is more generous than the rumor. Transfer penalties apply to long-term care eligibility, for stays in a skilled nursing facility. When they apply, the county looks at transfers made for less than fair value within the 30 months before the facility stay and can impose a period of ineligibility, calculated by dividing the transferred amount by the state’s average private pay rate, which is $14,440 for 2026.
Here is the sentence worth keeping: the state’s implementation guidance says transfers made from January 1, 2024 through December 31, 2025 will not be included in the look-back period. There were no asset rules when those transfers happened, and the guidance in DHCS’s MEDIL I25-23 and ACWDL 25-18 says they will not be counted retroactively. Penalties restart with transfers made on or after January 1, 2026. Anyone planning around the new limit going forward, spending down, gifting, restructuring, is making legal decisions with real consequences, and that is elder law attorney territory.
Why a fiduciary is writing about a health program
Because eligibility rules like these sit underneath almost everything a fiduciary administers for an aging client. A conservator budgeting for a conservatee’s care, a trustee making distributions for a beneficiary on public benefits, an agent under a power of attorney paying for in-home help: each of those roles now has to account for a limit that did not exist last year. It is the same discipline that governs how a special needs trust is administered in California, where every distribution is weighed against the benefits it could disturb, and it is one reason families ask about what an irrevocable trust is in California when they plan far enough ahead.
Whether and how to restructure assets under the reinstated rules is legal advice, and the right person for it is a California elder law attorney. What a professional fiduciary does is run the finances correctly once the plan exists: tracking the countable and the exempt, documenting distributions, and keeping a client eligible for the care they depend on. If your family is sorting out where an aging parent stands under the new limit, a conversation with the practice is a reasonable place to start.