California's Medi-Cal Asset Test: What’s Changing and Why It Matters

Over the past several years, California has taken bold steps to improve healthcare accessibility by eliminating asset limits for Medi-Cal, the state’s Medicaid program. This move allowed thousands of low-income seniors and disabled individuals to receive care without the burden of spending down their modest savings. However, in a dramatic policy reversal, Governor Gavin Newsom’s new proposal aims to reinstate asset tests in an effort to curb rising state healthcare costs. As this debate unfolds, it's crucial to understand what asset tests are, how they’ve evolved in California, and what this new proposal could mean for the state's most vulnerable residents.

Understanding the Medi-Cal Asset Test

An asset test evaluates an individual's or household's financial resources, such as bank accounts, property, and vehicles, to determine eligibility for public assistance programs. Historically, California's Medi-Cal program imposed strict asset limits: $2,000 for individuals and $3,000 for couples. These limits remained unchanged for decades, effectively disqualifying many low-income seniors and disabled individuals who had modest savings or owned property (Justice in Aging, 2022).

Recognizing the inequity, California enacted Assembly Bill 133 in 2021, initiating a two-phase elimination of the asset test. Phase I, implemented on July 1, 2022, raised asset limits to $130,000 for individuals and $195,000 for couples. Phase II, effective January 1, 2024, removed asset limits entirely for Non-MAGI (Modified Adjusted Gross Income) Medi-Cal programs, including Long-Term Care and Medicare Savings Programs (California Department of Health Care Services [DHCS], 2024). This reform simplified the application process and expanded access to healthcare for thousands of Californians (California Health Care Foundation, 2024).

The Proposed Reinstatement of Asset Limits

In response to a projected $12 billion budget deficit, Governor Gavin Newsom has proposed reinstating the asset test for Medi-Cal and In-Home Supportive Services (IHSS) applicants. The proposal would disqualify individuals with assets exceeding $2,000, including the value of primary residences, vehicles, and retirement accounts (Fox News, 2025). If approved, the asset test would take effect on January 1, 2026, potentially saving the state an estimated $94 million in the first year and up to $791 million annually thereafter (Los Angeles Times, 2025).

Implications for Medi-Cal Recipients

Reinstating the asset test could have profound consequences for low-income seniors and disabled individuals. Many could lose access to essential healthcare services, including long-term care and in-home support, if their modest assets exceed the proposed limits. Advocates argue that the asset test penalizes individuals who have saved responsibly and could force them to spend down their resources to qualify for care (CalMatters, 2025).

Conclusion

The elimination of Medi-Cal asset limits marked a significant advancement in healthcare equity for Californians. Reinstating these limits threatens to reverse that progress, disproportionately impacting vulnerable populations. As the state grapples with budget challenges, policymakers must balance fiscal responsibility with the imperative to provide accessible healthcare for all.

Concerned about how this proposal might affect you or someone you care about? We’re here to help you understand your options and protect your access to care.

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References

California Department of Health Care Services. (2024). Asset limit changes for Non-MAGI Medi-Cal. https://www.dhcs.ca.gov/services/medi-cal/eligibility/Pages/Asset-Limit-Changes-for-Non-MAGI-Medi-Cal.aspx

CalMatters. (2025). Elderly, disabled with $2,000 in assets could lose Medi-Cal. https://calmatters.org/health/2025/05/medi-cal-assets-newsom-health-insurance/

California Health Care Foundation. (2024). Understanding Medi-Cal asset eligibility. https://www.chcf.org

Fox News. (2025, May). Gavin Newsom proposes asset eligibility test to control soaring state Medi-Cal costs. https://www.foxnews.com/politics/gavin-newsom-proposes-asset-eligibility-test-control-soaring-state-medi-cal-costs

Justice in Aging. (2022). Medi-Cal asset limit elimination increases economic security for low-income older adults and people with disabilities. https://justiceinaging.org

Los Angeles Times. (2025). Gov. Newsom proposes 'asset test' for low-income and disabled Medi-Cal applicants. https://www.latimes.com/california/story/2025-05-30/gov-newsom-proposes-asset-test-for-low-income-and-disabled-medi-cal-applicants

Pedroncelli, R. (2024, May 14). Gov. Gavin Newsom presents his revised state budget during a news conference in Sacramento [Photograph]. Los Angeles Times. https://www.latimes.com/california/story/2025-05-30/gov-newsom-proposes-asset-test-for-low-income-and-disabled-medi-cal-applicants-what-does-that-mean