For many families caring for a loved one with a disability, Medi-Cal plays a critical role in providing access to healthcare and long-term supports. Unfortunately, the rules surrounding eligibility have changed several times in recent years, and another significant change is on the horizon.
Beginning July 1, 2027, California is scheduled to reduce the Medi-Cal asset limit for certain beneficiaries from $130,000 to $21,000 for an individual.Click here to see Medi-Cal’s latest update.
A Quick Look Back
Over the past five years, Medi-Cal’s asset rules have gone through several dramatic changes:
- Prior to July 2022:$2,000 asset limit
- July 2022:Increased to $130,000
- January 2024:Asset limit eliminated
- January 2026:$130,000 limit reinstated
- July 2027:Scheduled to decrease to $21,000
For parents who are simply trying to ensure their child’s future is secure, the back-and-forth changes can feel like a yo-yo, making it difficult to know which rules to plan around.
Who Is Impacted?
The good news is that this change does not affect everyone receiving Medi-Cal.
The asset limit generally applies to individuals whose eligibility is determined under Non-MAGI Medi-Cal rules, including many individuals who are age 65 or older, disabled, receiving long-term care services, or qualifying through certain disability-based Medi-Cal programs.
Many children and working-age adults who qualify for Medi-Cal under income-based (MAGI) rules are not affected by these asset limits.
What Assets Count?
One of the biggest misconceptions is that Medi-Cal looks at everything a person owns.
In reality, several important assets are generally excluded, including:
- A primary residence
- One vehicle
- Household furnishings and personal belongings
- Special Needs Trusts
- ABLE accounts
- Retirement funds, if you are receiving regular payments
However, cash, bank accounts, investment accounts, second homes, second vehicles, and other non-exempt resources may count toward the limit.
Why This Matters for Special Needs Families
Many families have worked hard to save for their loved one’s future. As a result, it is not uncommon to find assets scattered across:
- Savings accounts
- Inheritances
- Brokerage accounts
- Life insurance beneficiary designations
The upcoming reduction in the asset limit makes it even more important to ensure those resources are structured appropriately.
Planning Opportunities to Consider
Every family’s situation is different, but some strategies that may help preserve benefits include:
- Utilizing an ABLE account when appropriate
- Reviewing and properly funding Special Needs Trusts
- Coordinating beneficiary designations on retirement accounts and life insurance policies
- Spending countable assets on approved needs that improve quality of life
- Reviewing whether assets are titled in the most appropriate manner
The key is not to make rushed decisions. Instead, use this upcoming change as an opportunity to review how your loved one’s financial resources, government benefits, and estate planning documents work together.
One Piece of a Bigger Plan
This is an important part ofPillar 6: Financial Planning & Benefits, one of the Seven Pillars we believe families should consider when planning for a loved one with special needs.
Government benefits, Special Needs Trusts, ABLE accounts, and the way assets are structured can have a significant impact on long-term financial security—but they are only one part of the picture. A strong plan also considers your loved one’s abilities, support system, independence, lifelong needs, circle of care, and future housing.
Changes like this are a good reminder of why it is important to periodically look acrossall Seven Pillarsand make sure the pieces continue to work together.
Final Thoughts
The upcoming reduction in Medi-Cal’s asset limit is another reminder that government benefit rules can change quickly. Whether the limit is $2,000, $130,000, or $21,000, the most important question remains the same:
Have we structured our loved one’s resources in a way that protects both their quality of life and their eligibility for important benefits?
With the July 2027 change still ahead, families have time to review their plan thoughtfully, identify potential gaps, and make adjustments where needed.
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