California AB 116 – Medi-Cal Asset Test Reinstatement (Effective January 1, 2026)

California AB 116

Overview

Effective January 1, 2026, AB 116 reinstates the Medi-Cal program asset test of $130,000 per individual plus $65,000 for each additional household member for certain individuals whose income eligibility for Medi-Cal is not determined based on modified adjusted gross income (MAGI).

The asset test was in place during 2022 and 2023 and was phased out under AB 133 beginning in 2024. According to FAQs issued by the California Department of Health Care Services (DHCS), this change will impact California residents who:

• Are age 65 or older,

• Have a disability (physical, mental, or developmental),

• Live in a nursing home, or

• Are in a family that makes too much money to qualify under federal tax rules.

SSI Recipients

The reinstatement of the asset test does not impact Medi-Cal eligibility rules for Supplemental Security Income (SSI) recipients, who still must comply with the SSI asset limit rules:

• $2,000 for an individual

• $3,000 for a couple

Asset Reporting Requirement

Effective January 1, 2026, individuals to whom the reinstated asset test applies will be required to provide information about assets they own when they apply for or renew their Medi-Cal benefits.

The reinstatement of the asset test does not create new rules about which assets are counted or not counted for Medi-Cal eligibility.

Non-Countable Assets (Will Not Affect Eligibility)

Assets that are not counted and will not affect eligibility include:

• The individual’s main home (where they live)

• The individual’s main vehicle

• Household items such as furniture and clothing

• Retirement funds, if the individual is getting regular payments

Countable Assets (May Affect Eligibility)

Assets that are counted and therefore may affect eligibility include:

• Second homes

• Second vehicles

• Cash

• Bank accounts

Asset Transfers and Medi-Cal Eligibility

For most people, giving away or selling assets will not affect Medi-Cal eligibility.

If a person lives in a nursing home or may need long-term care in the future, assets they give away in 2025 will not affect their Medi-Cal. However, starting January 1, 2026, giving away assets for less than their worth could delay long-term care coverage.

If a person moves into a nursing home, Medi-Cal will look at any assets they gave away and determine whether they are eligible for Medi-Cal. Medi-Cal will look at any assets they gave away in the 30 months before they entered the facility. This is called a look-back period.

• Assets transferred before January 1, 2026, will not be counted.

• Transfers made on or after January 1, 2026, may cause a penalty that delays long-term care coverage.

Spending Down Countable Assets

Individuals can spend or give away countable assets to stay under the limit. This won’t affect Medi-Cal eligibility in most cases.

Individuals can use their money to buy certain things they need without causing a delay in coverage.

Examples include:

• Paying medical bills

• Buying clothes or household items

• Paying rent or mortgage

• Paying for school

• Fixing their home

• Paying their car loan or other debts

Summary

• The asset test returns in 2026 for non-MAGI Medi-Cal programs.

• MAGI-based Medi-Cal (used for most children and adults) remains asset-free.

• SSI recipients keep existing federal asset rules.

• Transfers made before 2026 are exempt from penalties.

• Look-back period: 30 months for long-term care, starting January 1, 2026.

• Reasonable spending on necessary items does not impact eligibility.

California AB 116 – Medi-Cal Asset Test Reinstatement

Reference:

California Department of Health Care Services (DHCS) — AB 116 and Medi-Cal Asset Limit FAQ (effective January 1, 2026).

https://www.dhcs.ca.gov/Medi-Cal/Pages/Help/asset-limits-faqs.aspx

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