California Reinstates Medi-Cal Asset Test - What to Know Now
In a significant shift for California’s healthcare safety net, the 2024–25 state budget officially reinstates an asset test for non-MAGI (non-income-based) Medi-Cal eligibility, reversing course from recent efforts to expand access¹.
As many of you may recall, California eliminated the Medi-Cal asset test in January 2024, allowing seniors and individuals with disabilities to qualify without regard to how much they had in savings, retirement accounts, or other countable assets³.
But just months later, mounting budget pressures prompted the state to roll back that expansion.
What’s in the Final Budget?
The final agreement between the Legislature and Governor Newsom does not return to the pre-2022 limits of $2,000 for individuals and $3,000 for couples. Instead, it reintroduces a higher asset threshold:
• $130,000 for individuals
• $195,000 for couples
These are the same limits that were temporarily in place from July 1, 2022, to December 31, 2023³.
Lawmakers framed this as a compromise — preserving some expanded access while helping the state reduce costs. According to the budget summary, the policy change is projected to save $45 million in FY 2025–26, growing to $510 million annually in future years¹.
For additional context and advocacy insight, organizations like The Arc of California are actively tracking this change².
Who Will This Impact?
The reinstated asset test will apply to non-MAGI Medi-Cal programs, which include:
• Seniors aged 65+
• People with disabilities
• Individuals in long-term care
• Participants in Home and Community-Based Services (HCBS) waivers
As before, some assets remain exempt — such as a primary residence, one vehicle, household goods, and certain personal belongings⁴. However, retirement accounts, savings, and second properties may again be subject to scrutiny.
When Does This Take Effect?
The change is set to take effect on January 1, 2026. Details around how the asset test will be implemented — including whether there will be a phase-in period or grandfathering for current beneficiaries — are not yet finalized.
What Should You Do Now?
If you or someone you care for may be affected, now is the time to start planning. Reinstating an asset test means more than just numbers on paper — it affects real lives and long-term care decisions.
It’s essential to speak with a special needs planner or benefits advocate who can help you evaluate your situation, prepare documentation, and explore strategies to protect eligibility and preserve assets.
At Van Hulzen Financial Advisors, we’re committed to helping you prepare for what matters most , including navigating complex benefit changes like these.
We’ll continue to monitor developments and share updates as more guidance becomes available.
Sources
¹ 2024–25 California State Budget – Health & Human Services Summary (PDF) Details the reinstated Medi-Cal asset test and projected cost savings of $45 million in FY 2025–26 and $510 million annually thereafter.
² The Arc of California – 2024 State Budget Update Advocacy insights and analysis on how the budget changes affect individuals with disabilities, seniors, and their families.
³ DHCS – Medi-Cal Asset Limit Changes Overview of previous and current Medi-Cal asset thresholds, including exempt and countable assets.
⁴ DHCS – Medi-Cal Eligibility Division Resources Reference for general eligibility rules, program changes, and how assets are treated under Medi-Cal.
*The information provided is for informational purposes only. It is not meant to be construed as advice or a recommendation to purchase or sell any securities. Van Hulzen Asset Management is an investment advisory firm registered with the Securities and Exchange Commission (“SEC”). SEC registration does not imply a certain level of skill and or expertise. Van Hulzen Asset Management does not provide tax advice, please consult your tax professional for any specific tax related questions.