California just pulled the rug out from under families planning for long-term care.

California’s temporary elimination of Medi-Cal asset limits ends January 1, 2026

and the new rules will catch many people off guard.

The New Reality

Starting January 1, 2026, these asset limits return:

• $130,000 for individuals
• $195,000 for couples
• Plus $65,000 for each additional household member

For married couples where one spouse needs long-term care, the “institutionalized” spouse keeps up to $130,000, while the “community spouse” at home can retain up to $157,920 (the 2025 Community Spouse Resource Allowance).

When You’ll Face Review

New applications filed after January 1, 2026 get immediate asset scrutiny. Current Medi-Cal recipients face review at their first annual renewal or circumstance change after that date. If your renewal falls in August, you’re safe through 2025 but will face the music in August 2026.

What Still Doesn’t Count

Your primary residence, household goods, personal effects, one vehicle, jewelry, IRAs or pensions with periodic distributions, whole life insurance under $1,500 face value, term life insurance, burial plots, prepaid irrevocable burial plans, $1,500 in burial funds, and certain business property remain exempt.

Transfer Penalties Return

Here’s where it gets painful. Beginning January 1, 2026, any asset transfers may trigger penalty periods for Long-Term Care Medi-Cal eligibility. The state won’t penalize transfers under $13,656 (2025’s Average Private Pay Rate), and exempt asset transfers remain penalty-free. But make no mistake—they’re watching.

The good news? No transfer penalties apply during 2025. That’s your window.

Why This Hits Hard

For two years, California families avoided the brutal “spend down” requirements that force people to burn through life savings before qualifying for care. That safety net disappears in four months.

Married couples and registered domestic partners face the biggest risk. Without proper planning, the healthy spouse could lose everything paying for their partner’s care.

Your 2025 Window

We have exactly one year to get this right. I’m updating my Long-Term Care Medi-Cal planning strategies to address the new asset limits, exemption rules, and transfer penalties. The final regulations aren’t out yet, but the framework is clear enough to start moving.

If you or a family member might need long-term care Medi-Cal, we need to talk now. 2025 still offers flexibility that vanishes January 1, 2026. The families who plan ahead will protect their assets. Those who wait will watch them disappear.

My practice is limited to estate planning and wealth management for California families. I’ve seen too many people lose everything because they waited too long to plan.

Call me at 805-244-5291 or email eric@ridleylawoffices.com. Let’s use this window while we have it.