California’s Medicaid program, Medi-Cal, is slashing asset limits 84% in July 2027. As a result, Medi-Cal members risk losing eligibility — and insurers are feeling the pressure.
In 2022, California lifted the asset limit from $2,000 to $130,000 for individuals. CMS eventually approved a state proposal to drop the asset test, but California resurfaced the limits at the beginning of 2026. The 2027 change will lower the asset limit from $130,000 for a single person to $21,000. The limit will be $31,000 for two people and $1,550 for each additional person, up to 10 people.
The revised asset limits will affect members who are at least 65 years old, have a disability, reside in a nursing home or are in a family that makes too much to qualify for the program under federal tax rules.
“When families face the challenge of securing long-term care for a loved one, Medi-Cal may be the only way they can afford the care they need,” Santa Clara Family Health Plan COO Chris Turner told Becker’s. “The added stress of navigating asset requirements and documentation is an unnecessary hardship during an already difficult time.”
The plan had already seen its population of older adults and people with disabilities drop by 4.5% since California reinstated the asset limit in January. The 84% cut next year could be “devastating” and potentially affect coverage for almost 60,000 plan members, Ms. Turner said. Across Medi-Cal and Medicare, Santa Clara Family Health Plan currently serves more than 275,000 people.
Assets include cash, bank accounts, second cars and second homes, as well as other financial resources. Primary homes, retirement funds that pay out regularly, main vehicles and household items do not count toward limits. Prospective Medi-Cal members will need to report assets during their application, and current members will need to do so during their renewal.
The asset limits are further contributing to a backdrop of tightened Medicaid eligibility. In 2027, HR 1’s Medicaid work requirements and more frequent eligibility checks go into effect for the expansion population.
“We are concerned about the whole host of new eligibility and enrollment changes ahead as new federal and state policies take effect that, taken together, will make it harder for Medi-Cal enrollees to maintain their coverage,” a spokesperson for the California Association of Health Plans told Becker’s. “The asset limits are just one of many policy changes that could disrupt coverage for millions of members who rely on Medi-Cal managed care.”
Considering this wave of forthcoming eligibility updates, health plans are working with providers and community organizations to inform members of changes, the association said. For example, Santa Clara Family Health Plan launched a multi-channel communications campaign in collaboration with community organizations.
Santa Clara Family Health Plan’s Community Resource Centers also provide in-person assistance with Medi-Cal applications and renewals, offering bilingual and bicultural staff to help members unpack the asset limits.
The website for California’s Department of Health Care Services said people requiring long-term care may need to spend down their assets. To do so, members can pay medical bills, purchase clothing or household items, pay their rent or mortgage, pay for education, pay off debts or fix their homes.
Transferring assets can be more complicated. Transfers before Jan. 1, 2026, will not be counted toward the asset limit, but those from on or after that date could prompt a penalty that delays coverage. Medi-Cal uses a look-back period to evaluate assets transferred in the 30 months before a member enters a long-term care facility.
To avoid losing coverage, members can distribute assets to their spouse or to a blind or disabled child. Members could also sell them for their full value. The DHCS website advised that members contact their Medi-Cal county office if they need help navigating transfers. Santa Clara Family Health Plan is also thinking about how to best support members with asset management.
“We recognize that managing assets without jeopardizing eligibility requires specialized knowledge,” Ms. Turner said. “We’re planning to explore what resources exist in our community to ensure our members receive the personalized support they need.”