A Parent Is Entering Skilled Nursing and the Medi-Cal Asset Test Is Back

If a parent is entering skilled nursing care right now, the timing matters more than it would have two years ago. As of January 1, 2026, California reinstated a Medi-Cal asset test under Assembly Bill 116 (AB 116, Stats. 2025, ch. 21, § 59, adding Welfare and Institutions Code § 14005.62): $130,000 for an individual applicant and $195,000 for a married couple. For a period before that, California had no asset test at all for Medi-Cal eligibility, which is likely why this is catching families off guard now. The reinstated limit is also scheduled to drop again on July 1, 2027, to roughly one-sixth of the current amounts. This page covers what counts, what is exempt, what a spouse who is staying home keeps, why a trust does not do what people think it does for eligibility, and what to actually do in the 30 days before you file the application.

What Is the Medi-Cal Asset Limit as of January 1, 2026?

The current limits, confirmed by the Department of Health Care Services (DHCS) in All County Welfare Directors Letter (ACWDL) 25-14, are as follows.

Source: AB 116 (2025), bill text, § 59, adding W&I Code § 14005.62; DHCS ACWDL 25-14.

Is the July 1, 2027 Drop Actually Going to Happen?

Under current law, yes, and this is the date I tell every family in this situation to put on the calendar. The scheduled figures are much lower than the 2026 numbers.

A couple sitting comfortably under $195,000 today could be tens of thousands of dollars over the scheduled 2027 limit with no change in their finances at all, simply because the statute changes under them. If your parent is entering care now, in 2026, that is actually the more favorable window under current law, not the more urgent problem, but only if the application and any planning are handled correctly from the start.

Before you treat July 1, 2027 as a hard deadline for your own planning, know what has to happen first, and what already did not. The $21,000 and $31,000 figures come from Welfare and Institutions Code § 14005.62 as amended by SB 164 (Stats. 2026, ch. 27, sec. 69, not AB 116), and the statute makes that date a floor, not a lock. It takes effect no sooner than July 1, 2027, and only once DHCS’s director certifies in writing that the state’s systems are ready, and only after the state secures the federal approvals the statute requires. If your parent is already enrolled when the new limit does take hold, it does not apply immediately to them either. It applies starting at their first annual redetermination on or after that date, which depending on renewal month can mean nearly a year of additional time at the current, higher limit. You may also have heard about a much harsher $2,000 and $3,000 proposal from the Governor’s May 2026 Revision, set to start January 2027. That was rejected in the final budget and is off the table. For a parent entering care now, the practical takeaway is the same one this page already gives: use the current, more generous window, and do not let uncertainty about the 2027 date talk you into rushing a transfer that the 30-month look-back would otherwise catch.

What Counts as an Asset, and What Is Exempt?

• The home: exempt while occupied. Under Welfare and Institutions Code § 14006 and DHCS guidance, the applicant’s principal residence is not counted toward the asset limit while the applicant lives there or intends to return to it, regardless of the home’s value.
• One vehicle: generally exempt.
• Personal effects and household goods: generally exempt.
• Cash, bank and brokerage accounts, and most real property other than the home: countable against the $130,000 / $195,000 limit.
• Assets in a revocable living trust: still countable. Because the person can revoke the trust and take the assets back, DHCS treats those assets as available for eligibility purposes, exactly as if they were held individually.

What Does the Community Spouse Keep? CSRA and MMMNA

When one spouse needs skilled nursing Medi-Cal and the other stays in the community, California allows the community spouse to keep resources and income above the applicant’s own limit, so the couple is not forced to spend down to poverty together.

Source: DHCS ACWDL 26-02. These figures work alongside the $195,000 couple limit above, not instead of it, and the interaction between the two is where I see families miscalculate eligibility most often before coming in.

Does a Living Trust Hide Assets From Medi-Cal? No, and Here Is What It Does Instead

A revocable living trust does not hide your parent’s assets from the Medi-Cal eligibility test. DHCS looks through a revocable trust to the assets inside it, and if your parent can revoke the trust and reclaim the assets, those assets count against the $130,000 or $195,000 limit the same as if held individually. Funding a trust the week before an application will not make assets disappear from the eligibility calculation.

What the trust does instead is protect assets after death. California’s Medi-Cal estate recovery program, since Senate Bill 833 (SB 833, Stats. 2016, ch. 30, § 22), is limited to the probate estate, codified at Welfare and Institutions Code § 14009.5(f)(3). Assets that pass through a properly funded revocable trust avoid probate, and therefore fall outside the state’s recovery claim after your parent passes. Assets left in your parent’s individual name, with no trust and no other survivorship mechanism, remain exposed to recovery. This is the reason funding, not just signing, a trust matters: an unfunded trust does nothing for either eligibility or recovery.

What Should You Do in the 30 Days Before the Application?

1. Total your parent’s countable assets against the $130,000 individual or $195,000 couple limit, excluding the home while occupied, one vehicle, and personal effects.
2. Confirm how the home is titled. The exemption under § 14006 covers the home itself regardless of title, but how it is titled determines whether it later passes through probate, where a recovery claim could reach it.
3. Check the last 30 months for any transfers or gifts. California applies a 30-month look-back for nursing-facility-related transfers, and transfers made on or after January 1, 2026 can trigger a period of ineligibility if made for less than fair value within that window; transfers before that date are not penalized under the reinstated rule.
4. If a spouse is staying in the community, calculate the CSRA and MMMNA before assuming the couple must spend down to the individual limit.
5. Fund the living trust now if it is not already funded, understanding this protects assets from estate recovery later, not from the eligibility test now.
6. Do not make large gifts or transfers in the days before filing without first checking how they interact with the 30-month look-back; a rushed transfer intended to help can instead delay eligibility.

Frequently Asked Questions

What is the Medi-Cal asset limit for a parent entering nursing care in 2026?

$130,000 for an individual applicant and $195,000 for a married couple, effective January 1, 2026, under AB 116 and DHCS ACWDL 25-14.

Will the asset limit change again after 2026?

Yes. Under current law it is scheduled to drop to roughly $21,000 individual and $31,000 couple on July 1, 2027.

Is the house counted as an asset for Medi-Cal eligibility?

No, not while your parent lives in it or intends to return to it. The home is exempt under Welfare and Institutions Code § 14006 regardless of its value.

Does putting the house in a trust protect it from the Medi-Cal asset test?

No. A revocable living trust does not hide assets from the eligibility test while your parent is alive. It does keep properly funded trust assets out of probate, and therefore out of estate recovery, after your parent passes, under SB 833.

What can the spouse who stays at home keep?

As of 2026, the community spouse can generally keep up to $162,660 in additional countable resources (the CSRA) and is entitled to a minimum monthly income allowance (the MMMNA) of $4,067 if their own income falls short, per DHCS ACWDL 26-02.

Can I just give away assets right before applying to get under the limit?

Not safely. California applies a 30-month look-back for nursing-facility-related transfers, and a transfer made on or after January 1, 2026 for less than fair value within that window can trigger a period of Medi-Cal ineligibility.

This page is attorney-authored general information about California’s Medi-Cal asset and estate recovery rules as of the date above. It is not legal advice for your specific situation, and eligibility depends on your parent’s actual assets, income, marital status, and county. If a parent is entering skilled nursing and you want to know exactly where their assets stand against the 2026 limit before you file, call 805-244-5291 or book a consultation.

Talk to Eric