"What has been will be again, what has been done will be done again; there is nothing new under the sun." – Ecclesiastes 1:9
As of January 1, 2026, California’s Medi-Cal program has reinstated asset limits for long-term care eligibility, rolling back to the rules in place in 2023. This shift ends a brief period of expanded access and brings back familiar challenges for families planning for skilled nursing or other long-term care needs.
This post explains Medi-Cal basics, how it differs from Medicare, the two categories of benefits, the reinstated asset rules, and a proven estate planning strategy, the Medi-Cal Asset Protection Trust (MAPT), to help qualify while protecting your home and legacy.
Medi-Cal vs. Medicare: Key Differences
Medi-Cal is California’s version of Medicaid, a joint federal-state program providing health coverage to low-income individuals and families of all ages.
Medicare, by contrast, is a federal health insurance program primarily for people 65+ (or younger with certain disabilities). It has no income or asset tests, eligibility is based on age or disability, though premiums apply for Parts B and D.
We’ll focus here on Medi-Cal, particularly long-term care eligibility under the new 2026 rules.
Medi-Cal’s Two Main Benefit Categories
Traditional Care Benefits
These cover everyday needs: doctor visits, outpatient services, hospitalizations, emergencies, prescriptions, preventive care, mental health, substance abuse treatment, dental, and vision.
Eligibility is income-based using Modified Adjusted Gross Income (MAGI) at 138% of the federal poverty level—roughly $21,600 annually for a single person in 2026.
Long-Term Care Benefits
These support ongoing assistance due to age, disability, or chronic conditions, with a focus on skilled nursing facility care (distinct from independent or assisted living).
Eligibility requires:
- Medical Need: A physician’s assessment showing help needed with activities of daily living (bathing, dressing, eating, mobility).
- Financial Rules: Income limits plus the reinstated asset test (detailed below).
The Asset Limit Rollercoaster: Why the Change and Reversal?
Why the change and reversal?
Quick answer: Our beloved politicians wanted to expand the program to get more people into long-term care, but alas, last year our governor realized the budget couldn't support it, so he pulled it back.
Official state answer: They eliminated the asset test in 2024–2025 to simplify access, reduce paperwork, and allow modest savings without forced “spend-down.” This helped low- to moderate-income seniors and people with disabilities keep retirement funds or emergency reserves while qualifying for care. Rising enrollment and costs, combined with budget pressures, led to reinstatement effective January 1, 2026, at 2022 levels: $130,000 for an individual + $65,000 per additional household member.
Note for current beneficiaries: You won’t lose coverage immediately. Asset reporting starts at your 2026 annual redetermination date. This provides planning time.
Here’s the historical timeline:
| Year |
Single Limit |
Couple Limit |
Notes |
| 2016–2021 |
$2,000 |
$3,000 |
Low federal-tied limits. |
| 2022 (Jan–Jun) |
$2,000 |
$3,000 |
Pre-reform. |
| 2022 (Jul–Dec) |
$130,000 |
$195,000 |
Increase via AB 133. |
| 2023 |
$130,000 |
$195,000 |
Continued. |
| 2024–2025 |
No limit |
No limit |
Full elimination. |
| 2026+ |
$130,000 |
$195,000 |
Reinstatement to 2022 levels (effective Jan 1, 2026). |
Key Asset Rules You Need to Know
Not all assets count. They’re divided into countable (non-exempt) and exempt.
1. Your Home Is Exempt
The primary residence doesn’t count toward the limit, regardless of value ($250,000 or $10 million).
Other common exemptions: one vehicle, personal belongings, burial funds/plots, and certain retirement accounts in payout status.
2. The 30-Month Look-Back Period
Transfers of non-exempt assets for less than fair market value trigger scrutiny. Starting January 1, 2026, Medi-Cal reviews the prior 30 months. Unallowable transfers create a penalty period of ineligibility (transfer amount ÷ average nursing home cost, ($13,000–$14,000/month).
Transfers of exempt assets (like your home) don’t trigger penalties - they’re already ignored.
Note: Transfers made 2024–2025 are exempt from look-back.
The Medi-Cal Asset Protection Trust (MAPT): A Smart Strategy
A MAPT is an irrevocable trust that shelters assets, helping meet the limit without full spend-down. It protects wealth for heirs while allowing supplemental use for your needs.
Consider this common scenario: Mom’s bank/investments are under $130,000, but her home is worth $750,000. She qualifies now, the home is exempt. But care costs will deplete her cash. Thinking about selling the home to replenish funds? That converts exempt equity (~$700,000 net) into countable cash, pushing her far over the limit and disqualifying her.
A MAPT fixes this.
How It Works: Step by Step
- Create the Trust: Mom establishes an irrevocable MAPT, naming a child as trustee and her children as beneficiaries. She retains the right to live in the home.
- Transfer the Home: Deed the exempt home into the trust, no penalty, as it’s exempt.
- Sell if Needed: The trust-owned home can be sold; proceeds stay in the trust, non-countable for Mom’s eligibility.
- Ongoing Benefits: The trustee manages funds for Mom’s supplemental needs (not covered by Medi-Cal). Assets are protected from creditors/lawsuits, better than direct gifting to children, where money could be lost or mismanaged.
Outcome: Mom qualifies sooner, preserves family wealth, and gains professional oversight.
Final Thoughts
The 2026 changes echo past rules, but proactive planning, like a properly timed MAPT, can secure care without sacrificing your legacy. Act early: Irrevocable trusts need advance setup, and look-back timing matters.