California Medi-Cal Planning for Long-Term Care
The cost of long-term care can place a significant financial burden on individuals and families. Medi-Cal can help pay for nursing-home care and certain other long-term-care services for people who meet the program’s eligibility requirements. However, qualifying for Medi-Cal involves rules concerning income, assets, transfers of property, and, for married couples, protections available to the spouse who remains at home.
California’s Medi-Cal eligibility rules have changed significantly in recent years. Effective January 1, 2026, California reinstated an asset test for many Medi-Cal applicants and recipients, including individuals who are age 65 or older, have a disability, or require nursing-home care. Through June 30, 2027, the asset limit is generally $130,000 for one person, with an additional $65,000 for each additional qualifying household member. Beginning July 1, 2027, the asset limit is scheduled to decrease substantially—to $21,000 for one person and $31,000 for two people, with an additional $1,550 allowed for each additional qualifying household member. Different rules and additional protections may apply to married couples and registered domestic partners.
Not every asset is counted when determining Medi-Cal eligibility. For example, a principal residence, one vehicle, household goods, and certain retirement assets may be excluded under applicable Medi-Cal rules. Determining what is countable—and how assets should be structured—can therefore be just as important as determining their total value.
Planning Before Long-Term Care Is Needed
Advance planning can provide more options. Depending on the circumstances, Medi-Cal planning may involve reviewing how assets are titled, determining whether assets are exempt or countable, considering available spousal protections, coordinating retirement and other financial resources, and evaluating whether transfers or other estate-planning strategies are appropriate.
Transfers require particular care. For individuals seeking Medi-Cal coverage for nursing-facility-level care, transfers of nonexempt assets for less than fair market value can result in a period of ineligibility. California uses a 30-month look-back period, and transfers made on or after January 1, 2026 may be subject to these rules. Because the consequences depend upon the timing, type, and recipient of a transfer, assets should not be given away simply to obtain Medi-Cal eligibility without first considering the applicable rules.
Planning When Long-Term Care Is Already Needed
It is not necessarily too late to plan after a person enters a nursing home or develops an immediate need for long-term care. Depending upon the person’s assets, income, marital status, prior transfers, and other circumstances, planning opportunities may still be available.
For married couples, Medi-Cal includes spousal impoverishment protections designed to prevent the spouse who remains at home from being left without adequate financial resources. These rules can permit the community spouse to retain assets beyond the ordinary individual asset limit.
Medi-Cal Estate Recovery
Eligibility is only one part of Medi-Cal planning. It is also important to consider whether Medi-Cal may seek reimbursement after a recipient’s death. Under current California law, for Medi-Cal recipients who die on or after January 1, 2017, estate recovery is generally limited to certain long-term-care-related benefits received after age 55 and to assets that are subject to probate at the recipient’s death. Exceptions and hardship provisions may apply.
Developing a Medi-Cal Plan
Medi-Cal planning is not simply a matter of spending down assets. A well-designed plan should consider the individual’s need for care, available income, exempt and nonexempt assets, the needs of a spouse or other family members, existing estate-planning documents, and the individual’s long-term estate-planning goals.
Planning for long-term care does not have to wait until a crisis occurs. The Law Office of Maureen Lyons, PC helps California families evaluate Medi-Cal eligibility, asset protection strategies, and long-term care planning options. Contact our office to discuss how the Medi-Cal rules may apply to your circumstances.