Changes Coming to Medi-Cal’s Asset Test

As of January 1, 2022, California is implementing several major changes to Medi-Cal.  One notable change is the gradual elimination of the asset test for elderly and disabled individuals to qualify for Medi-Cal.

Currently, in order to qualify for Medi-Cal, a single person cannot have more than $2,000 in assets and a married person cannot have more than $137,400 in assets.  In both instances, the applicant may have one home and one vehicle, but the value of their remaining assets must meet the asset limit. This strict limit causes many applicants to “spend down” their assets to qualify for Medi-Cal coverage.

On July 1, 2022, the Medi-Cal asset limit will significantly increase so that a single person can have as much as $130,000 in assets and a married person can have as much as $267,000 in assets.  Effective July 1, 2024, the asset test will be eliminated entirely.

The Department of Health Care Services will be sending notices to individuals who were denied Medi-Cal benefits or terminated from Medi-Cal coverage because their assets exceeded the $2,000 limit to inform them of these changes.

Importantly, Medi-Cal’s asset test changes do not impact the asset test for Supplemental Security Income (SSI), which is a federal program administered by the Social Security Administration.  Medi-Cal and SSI currently have similar asset and income limits, so that an individual who qualifies for one program would typically qualify for the other program.  However, once the Medi-Cal asset test changes take effect, an individual who chooses to retain their assets and still qualify for Medi-Cal might no longer qualify for SSI.

Medi-Cal’s income rules remain the same, so income planning is still an important aspect of maintaining Medi-Cal coverage. Additionally, Medi-Cal’s estate recovery rules remain the same, meaning that the state is still permitted to recover from a Medi-Cal recipient’s estate after their death. However, proper estate planning in advance can help preserve a Medi-Cal recipient’s estate after their death.

If you currently receive Medi-Cal or plan to apply for these benefits in the future, you should consult an estate planning attorney to ensure your advance planning needs in relation to Medi-Cal are addressed.