California Medi-Cal Asset Limits: What Counts, What Is Exempt, and How the Rules Work

If a parent or spouse needs nursing-home care in California, Medi-Cal now counts their assets again. The California Department of Health Care Services says that through June 30, 2027, the limit is $130,000 for one person, plus $65,000 for each extra person in the household. Starting July 1, 2027, the limit for one person drops to $21,000. Some assets are not counted, and married couples have extra protections.

Families facing this question may have just heard Medi-Cal mentioned for the first time by a hospital discharge planner or a nursing-home business office. They may have heard from a friend that California "got rid of" the asset test, and now they are being told it is back. An adult child may want to know whether a parent's savings will be used up before Medi-Cal steps in. A spouse may want to know what they keep if their husband or wife moves into a facility and they stay in the family home.

This page walks through California's asset rules for long-term care in the order those families usually meet them: what the limit is, what is not counted, how a spouse at home is protected, how gifts and transfers are reviewed, what happens to the home after death, which planning tools the rules describe, and how an application and an appeal work. Federal law sets the framework, and California runs its own program with its own rules, so this page keeps the two apart.

What the Medi-Cal Asset Limit Actually Means

An asset limit, in the words of the California Department of Health Care Services (DHCS), the state agency that runs Medi-Cal, is "the most you can own in countable assets and still qualify for Medi-Cal." A countable asset is anything the applicant owns that Medi-Cal adds up against that limit, such as money in bank accounts. Assets the program does not count are called exempt assets, covered in the next section.

The current figures come from the DHCS Asset Limit Frequently Asked Questions page:

• Through June 30, 2027: $130,000 for one person, plus $65,000 for every extra person in the house, up to 10 people.
• Starting July 1, 2027: $21,000 for one person and $31,000 for two people; DHCS says to "add $1,550 for every extra person in your house (up to 10 people)."

DHCS notes that not everyone in the home counts toward family size; adult children living with the applicant, for example, are not included. The same page says some married couples or registered domestic partners may qualify for higher limits under the spousal impoverishment rules.

The confusion many families feel about this has a real source: the rules have changed three times since 2022. According to DHCS All County Welfare Directors Letter No. 25-14, a 2021 state law set up a two-phase plan for what DHCS calls "Non-MAGI" Medi-Cal programs. These are the programs that do not use the income-tax-based method of counting income, and they include the programs older and disabled Californians use for long-term care. The first phase, effective July 1, 2022, raised the asset limit to $130,000 for one person and $65,000 for each additional household member. The second phase, effective January 1, 2024, eliminated asset limits for those programs.

That elimination did not last. DHCS's FAQ states that a California law requires Medi-Cal to count assets for some Medi-Cal programs as of January 1, 2026, and Letter No. 25-14 is titled as a reinstatement of asset limits for Non-MAGI programs. A family that read in 2024 that "Medi-Cal no longer looks at assets" was reading something that was true then and is no longer true for nursing-home Medi-Cal. DHCS says the limits apply to people who are 65 or older, have a disability, live in a nursing home, or are in a family that makes too much money to qualify under federal tax rules, and Letter No. 25-14 says the Pickle, Disabled Adult Child (DAC) and Disabled Widow/er (DW) programs will continue to be exempt from the asset test.

Assets That Are Exempt Under Medi-Cal Rules

An exempt asset is a resource Medi-Cal does not count toward the limit. Exempt assets matter because two families with the same net worth can look very different to Medi-Cal depending on what that worth is made of.

At the federal level, the resource rules that Medicaid's spousal provisions refer to begin their list of exclusions with the home. Under 42 U.S.C. § 1382b, "there shall be excluded— (1) the home (including the land that appertains thereto)." That list continues with other categories not reproduced here, so the home is one exclusion among several, not the only one. The spousal impoverishment statute, 42 U.S.C. § 1396r-5, carries those exclusions into its own definition of "resources." A separate federal rule applies to home equity for long-term care: under 42 U.S.C. § 1396p(f), a person is not eligible for nursing facility services or other long-term care services if their equity interest in their home exceeds the statute's dollar limit, which is indexed each year and which a state may raise up to a set ceiling, unless the person's spouse, or their child who is under 21 or is blind or disabled, is lawfully residing in the home; the statute also provides for a waiver in a case of demonstrated hardship. The CMS chart of 2026 standards lists home equity limits of $752,000 (minimum) and $1,130,000 (maximum), effective January 1, 2026. California's own figure depends on California's current rules.

California decides how exemptions work inside Medi-Cal. The DHCS FAQ explains that applicants and members share information about what they own when they apply or renew, and it names ways a person can lower countable assets, including paying off a car loan or other debts. DHCS Letter No. 25-14 also lists a state form titled "Medi-Cal General Property Limitations (MC 007)" among the forms tied to the reinstated limits. For the home, DHCS says that a home a person owns and plans to return to won't count against them, that a home also won't count if a spouse or partner or a dependent relative lives there, and that any extra homes will count. Among its examples of assets, DHCS lists as not counted a person's main home (where they live), main vehicle, household items such as furniture and clothes, and retirement funds if the person is getting regular payments, and lists as counted second homes, second vehicles, cash and bank accounts. A county eligibility worker applies California's rules to each item a family reports.

For a husband or daughter sitting with a stack of bank statements and a deed, this is often the section that makes the asset limit feel less abstract. The question is rarely "how much do we have" and more often "how much of what we have does Medi-Cal count." The difference between countable and exempt also matters later, because an asset that was exempt during life can still come up when DHCS looks at an estate after death.

How Spousal Impoverishment Rules Protect the At-Home Spouse

Federal law sets a separate path when one spouse needs long-term care and the other stays home. That spouse at home is called the community spouse. The spouse receiving care is called the institutionalized spouse. The governing statute is 42 U.S.C. § 1396r-5, which says that for an institutionalized spouse its provisions "supersede any other provision" of the Medicaid statute that is inconsistent with them. Medicaid.gov's spousal impoverishment page explains that Congress enacted these rules in 1988 to keep the spouse at home from being left "with little or no income or resources."

How the couple's assets are counted. Under 42 U.S.C. § 1396r-5(c), the state totals the couple's resources as of the start of the first continuous period of institutionalization and computes a "spousal share" equal to one-half of that total. At application, all resources held by either spouse are treated as available to the institutionalized spouse, but generally only to the extent they exceed the amount protected for the community spouse. Either spouse can ask the state for an assessment of the couple's total resources, and the state must give a copy to each spouse with a notice about the right to a fair hearing. After eligibility is established, the statute says no resources of the community spouse are deemed available to the institutionalized spouse.

The community spouse resource allowance. The community spouse resource allowance, or CSRA, is the amount of the couple's combined countable assets the spouse at home may keep; under 42 U.S.C. § 1396r-5(f)(2), it is figured from the greatest of several amounts, including an amount specified under the state plan and the spousal share, not from the spousal share alone. DHCS All County Welfare Directors Letter No. 26-02, dated January 28, 2026, on the 2026 spousal impoverishment caps, states that starting January 1, 2026, the CSRA is $162,660, and that this 2026 value applies only to cases newly determined under the spousal impoverishment provisions from January 1, 2026, onward. The CMS Updated 2026 SSI and Spousal Impoverishment Standards bulletin explains that the community spouse minimum and maximum resource allowances are adjusted each January, and its 2026 chart lists a minimum resource standard of $32,532 and a maximum resource standard of $162,660.

Letter No. 26-02 also gives instructions for a "CSRA transfer period," the time during which property is moved out of the institutionalized spouse's name; it begins with the initial month of eligibility and ends on the last day of the month in which the 90th day falls from the date the approval notice of action is mailed. It states that at the end of that period, any countable property held in the institutionalized spouse's name above $130,000 is considered excess property, unless undue hardship applies, and that for 2026 annual renewals of cases made eligible under the spousal rules before January 1, 2026, the county will discontinue eligibility if the institutionalized spouse's property still exceeds $130,000 at the end of the transfer period. It also says that for cases approved under the spousal rules, county workers are not to request the community spouse's property verifications at annual renewal.

The minimum monthly maintenance needs allowance. The minimum monthly maintenance needs allowance, or MMMNA, is the minimum monthly income the community spouse is allowed to keep. DHCS Letter No. 26-02 states that effective January 1, 2026, the MMMNA is $4,067 per month (the figure effective January 1, 2025, through December 31, 2025, was $3,948). The CMS bulletin explains that federal law directs the MMMNA to be adjusted each July 1, in line with changes to the federal poverty level, along with the related housing allowance. The bulletin's 2026 chart lists the federal minimum MMMNA as $2,705 a month for all states but two, effective July 1, 2026; the California figure DHCS gives above runs from January 1, 2026.

When the at-home spouse's income is low. Medicaid.gov explains that, depending on how much income the community spouse actually has, part of the institutionalized spouse's income can be set aside for the community spouse's use. Under 42 U.S.C. § 1396r-5(d), after eligibility is set, certain allowances are deducted from the institutionalized spouse's monthly income before the rest goes toward the cost of care, starting with a personal needs allowance. Medicaid.gov notes that the income allowance applies as long as the income is actually made available to the community spouse.

For a spouse who has never managed the household finances alone, these terms can feel like a second language. The point underneath them is simpler: federal law treats the spouse at home as someone who has to go on living, and California applies that rule with its own figures and forms.

The Look-Back Period and Transfer Penalties in California

A gift made years earlier can turn into a worried question when a parent enters a nursing home. The look-back period is a window of time before a set date during which Medi-Cal reviews whether assets were given away or sold for less than they were worth. In California, DHCS says the window is the 30 months before a person entered the nursing facility. A penalty period is a stretch of months during which long-term care coverage is not paid because of such a transfer.

The federal rule. Under 42 U.S.C. § 1396p(c)(1)(A), a state plan must provide that if an institutionalized individual or spouse disposes of assets for less than fair market value on or after the look-back date, the person is ineligible for certain services for a period of months. The services named are nursing facility services, an equivalent level of care in another institution, and home or community-based waiver services. The federal look-back date is 60 months before the relevant date for certain trust-related transfers and for any other disposal of assets made on or after February 8, 2006; the statute's 36-month figure applies only to other disposals made before that date. For an institutionalized person, the relevant date is the first date the person is both institutionalized and has applied.

The statute sets the length of the penalty as the total uncompensated value of all assets transferred on or after the look-back date, divided by the average monthly cost to a private patient of nursing facility services in the state at the time of application. A state "shall not round down" fractional periods. For transfers made on or after February 8, 2006, the penalty generally starts on the later of the first day of a month in which assets were transferred, or the date the person would otherwise be eligible for and receiving institutional-level care based on an approved application.

California's rule. On the transfer rule, the DHCS FAQ says that for people in a nursing home or who may need long-term care: "Giving away assets for less than they're worth could delay your long-term care coverage." DHCS says the change took effect on January 1, 2026. It also says that for most people, giving away or selling assets will not affect Medi-Cal, and it lists ways to give away or sell assets without losing Medi-Cal: giving them to a spouse or someone helping the spouse, giving them to a blind or disabled child, or selling them for their full value. DHCS Letter No. 25-14 says further guidance would follow on transfers of assets and periods of ineligibility. DHCS states that if a person moves into a nursing home, Medi-Cal will look at any assets given away in the 30 months before the person entered the facility, and calls this the look-back period. Transfers made before January 1, 2026, will not be counted; transfers made on or after January 1, 2026, may cause a penalty that delays coverage. Not every state uses the same look-back, and the federal 60-month figure is the federal framework, not California's rule.

Exceptions. A transfer is not always penalized. Under 42 U.S.C. § 1396p(c)(2), a person is not made ineligible to the extent certain transfers occurred, including where the assets transferred were a home and title went to the person's spouse. The statute lists further exceptions; which ones apply to a family's facts is a question for an attorney who reviews the dates and documents. The statute also treats some transactions as transfers unless they meet stated conditions, including funds used to buy a promissory note, loan or mortgage, and the purchase of a life estate in another person's home unless the buyer lives there at least one year after the purchase.

Estate Recovery: What Medi-Cal Can Seek After Death

Estate recovery is the process by which a state seeks repayment, from a deceased member's estate, of certain Medicaid costs it paid. Medicaid.gov's eligibility policy page states that state Medicaid programs must recover the cost of certain benefits, "including nursing facility services, home and community-based services, and related hospital and prescription drug services," and may recover for other benefits, with an exception for certain Medicare Savings Program cost-sharing. For a person who was 55 or older when the care was received, 42 U.S.C. § 1396p(b) requires the state to seek recovery from the person's estate for those services, and allows any recovery only after the death of the person's surviving spouse, if any, and only when there is no surviving child who is under 21 or is blind or disabled.

In California, the DHCS Estate Recovery Program page states that for members who died on or after January 1, 2017, repayment is limited to estate assets subject to probate that the member owned at the time of death. DHCS also states that repayment only applies to benefits received on or after the member's 55th birthday, and, for members who died on or after January 1, 2017, only to payments for nursing facility services, home and community based services, and related hospital and prescription drug services received while the member was an inpatient in a nursing facility or received home and community based services. DHCS may waive its claim if payment would cause a substantial hardship; a request for that waiver must be submitted to DHCS within 60 days of the date on the DHCS Estate Recovery claim letter. Estate planning and probate themselves are outside what this page covers.

The home is usually the asset families think about first here. It is often the largest thing a parent owns, it is excluded from countable resources under the federal rule in 42 U.S.C. § 1382b, and it carries meaning that a savings account does not. A home being exempt while a parent receives care and a home being outside estate recovery after death are two separate questions, and each turns on its own rule.

Planning Tools the Rules Allow: Trusts, Annuities, and Spend-Down

Spend-down means lowering countable assets to the applicable limit, for example by paying for care, goods or services, or by paying debts. The DHCS FAQ names paying off a car loan or other debts as one way to reduce countable assets. With California's limit set at $130,000 for one person through June 30, 2027, and $21,000 from July 1, 2027, the amount a family would need to spend down can change depending on when an application or renewal happens. Spend-down of assets is different from any monthly income calculation; the two follow separate rules.

Annuities. Under 42 U.S.C. § 1396p(c)(1)(F), buying an annuity is treated as a transfer for less than fair market value unless the state is named as remainder beneficiary in the first position for at least the total medical assistance paid, or in the second position after a community spouse or a minor or disabled child (and in first position if that spouse or child's representative disposes of the remainder for less than fair market value). Under subparagraph (G), an annuity bought by or for an applicant counts as an asset for transfer purposes unless it is one of certain retirement-account annuities named in the statute, or it is irrevocable and nonassignable, actuarially sound under Social Security Administration actuarial publications, and pays equal amounts with no deferral and no balloon payments. Whether a particular annuity meets these terms depends on its contract.

Trusts. Medicaid.gov explains that when an individual, a spouse or anyone acting for them sets up a trust using at least some of the individual's funds, "that trust can be considered available to the individual for determining eligibility for Medicaid." The detailed federal trust rules are in 42 U.S.C. § 1396p(d), and the statute's look-back provision applies the longer 60-month window to certain trust payments. A trust does not always protect assets. Whether trust property is counted depends on the trust's terms, who funded it, when, and how California applies the rules.

None of these is a shortcut around the rules. Each is a category the statute and agency guidance describe, with conditions that decide how it is treated.

How to Apply for Medi-Cal Long-Term Care in California

Medi-Cal eligibility is decided at the county level. The DHCS FAQ directs married couples with questions about spousal impoverishment to their county Medi-Cal office, and DHCS's letters on asset limits and spousal caps are addressed to county welfare directors, who apply them to each case.

An applicant shares information about what they own when they apply or renew, according to DHCS. Letter No. 25-14 encloses notice language for denials and discontinuances where a person exceeds the asset limit or fails to provide asset information. In practice, that means the county looks at what the applicant owns, whether it is countable, and, for long-term care, whether assets were transferred for less than their value. Letter No. 25-14 also says that a Non-MAGI member with an annual renewal due on or after January 1, 2026, who is discontinued for failing to provide asset information or asset verification must be given a 90-day cure period; if the member provides the information during that period and is found property eligible, the discontinuance is rescinded and eligibility restored as though the information had been provided on time. Its notice language for a discontinuance due to excess assets also says: "If your excess property is spent down before the end of this month or the end of the following month, your discontinuance can be rescinded." Some Medi-Cal eligibility decisions are made through Covered California rather than the county.

Appeals. According to the California Department of Social Services State Hearings Division, a person who disagrees with an action by the county or DHCS, or with an eligibility determination by Covered California, has 90 days to request a state hearing; after 90 days, the person must show a good reason for asking late. The same State Hearings Division page says that DHCS received approval from CMS to temporarily extend the time for Medi-Cal members to request a fair hearing related to a redetermination of eligibility to 120 days from the date the notice of action is mailed; the extension is effective April 1, 2023, remains in effect until further notice, includes terminations of Medi-Cal eligibility, and does not apply to new Medi-Cal applications. Letter No. 25-14 describes asset verification at an annual renewal as part of "the annual redetermination process." A hearing can also be requested when an application was turned in and the county did not act on it. For actions by a Medi-Cal managed care plan, the person generally must first appeal to the plan within 60 calendar days of the notice of action, then may request a state hearing within 120 calendar days of the plan's Notice of Appeal Resolution. The page says requests go to the county welfare department at the address on the Notice of Action, or by mail to the State Hearings Division.

Families often reach this point tired, with a denial letter in hand and a facility bill still arriving. The denial letter itself usually names the reason the county gave.

If You'd Like to Talk Through Your Family's Situation

California's asset rules for long-term care have shifted three times since 2022, and the limit is scheduled to change again on July 1, 2027. That makes timing part of the question for any family weighing an application, a spousal division or a past gift. The facts that matter include what each spouse owns, the dates and amounts of any transfers, whether care is in a nursing facility or at home, and how the spousal allowances and the probate-only estate recovery rule apply to the family's circumstances. This page does not cover Medicare, private long-term-care insurance or veterans' benefits.

You can send a request for a consultation about your family's Medicaid and long-term-care options through Medicaid Asset Protection Group; requests may be passed to attorneys who decide for themselves whether to respond.