Medi-Cal Nursing Home Planning

2026 QUICK REFERENCE

Asset Limits (Effective January 1, 2026):
– Single person: $130,000
– Married couple: $195,000
– Existing recipients: Reviewed at annual renewal
– Action needed: Review assets before you apply or submit your renewal.

Important: The information below is provided for educational purposes only and is not legal advice. Medi-Cal rules are complex and highly fact-specific. Do not take action without consulting a qualified attorney. We would be honored to assist you.

Is Medi-Cal Nursing Home Planning Right for You?

We specialize in helping families navigate the complexities of long-term care, specifically:

Individuals diagnosed with degenerative diseases like Alzheimer’s or Parkinson’s.
Families with substantial assets who want to preserve their assets for their loved ones while ensuring quality long-term care is available when needed.Quick Navigation

What is Long Term Care under Medi-Cal?

Medi-Cal is the California state version of what is called Medic-Aid in other states. It is funded primarily by the federal government and is administered by the State. It pays for the medical care of those who do not have much in income or assets. It has no minimum age limit (unlike Medicare). In particular, it will pay for long term care in a skilled nursing facility (but generally not for care in assisted living or a board and care home). Medicare will only pay for part of the cost of the first 100 days in a skilled nursing facility, and only then if they have come from an acute care hospital.

What are the asset limits of Medi-Cal?

Until December 31, 2025, there was amazingly no asset limit for qualifying for long term care under Medi-Cal. Beginning January 1, 2026, California has returned to the asset-based eligibility rules used prior to 2024. To qualify, an applicant’s ‘non-exempt’ assets must be under $130,000 for a single individual or $195,000 if both spouses need assistance.

Common Exempt Assets (Not Counted):

Primary Residence: Your home is generally exempt regardless of value (though future equity caps may apply).
One Vehicle: Unlimited value if used for the applicant’s benefit.
Retirement Accounts: IRAs and 401(k)s are exempt with proper reinvestment and distribution planning.
Personal Property: Household goods, jewelry (but a limit for a single person), and burial plots.
Assets of a spouse: Exempt if they do not exceed an amount called the Community Spouse Resource Allowance (the “CSRA”). For 2026, the CSRA is $162,660. (Note: the exempt assets of a spouse are not counted, such as their jewelry.)

What This Means in Practice:
A married couple could potentially protect:
– Their home (any value)
– $162,660 for the well spouse (the CSRA)
– $130,000 for the ill spouse
– All properly structured retirement accounts
– Other exempt assets listed above

Proper planning often allows many families to protect substantial assets — often several hundred thousand dollars or more — depending on the circumstances.

Do the reinstated asset limits of Medi-Cal apply to existing recipients?

Yes, the reinstated asset limits apply to both new applicants and current recipients of long-term care Medi-Cal.

However, existing recipients are not automatically cut off on January 1, 2026. Instead, compliance is reviewed during the annual Medi-Cal “redetermination”, when the county reevaluates the current assets.

IMPORTANT: You have until the next annual redetermination to ensure compliance. Missing this deadline can lead to a suspension of benefits, requiring a complex and time-consuming re-application process. Proactive adjustment is much simpler than a retroactive appeal.

Action Steps for Current Recipients:

Locate your last renewal notice to determine your next review date.
Calculate your current countable assets.
If over the limit, contact our office immediately to discuss options.
Do not attempt asset transfers without legal guidance.

Not all assets count the same under Medi-Cal rules, and improper planning can result in loss of benefits when you need them most.

May I Give Away Assets?

Asset Gifting: Powerful but Requires Careful Planning

Done correctly, strategic gifting can preserve hundreds of thousands of dollars. Done incorrectly, it can disqualify you from Medi-Cal when you need it most.

How California’s Gifting Rules Work:

Gifts within 30 months of applying for long-term care Medi-Cal can cause ineligibility
In 2026, each $14,440 in disqualifying gifts triggers one month of ineligibility. This amount is known as the “Average Private Pay Rate” and reflects the average monthly cost of nursing home care as calculated by the State of California.
Example: A $144,400 gift creates 10 months of ineligibility.
Gifts of exempt assets (like transferring a home to children) generally don’t cause penalties.
California’s liberal gifting rules create unique planning opportunities.
Transfers made between January 1, 2024, and December 31, 2025, do not result in any penalty period, regardless of when a Medi-Cal application is filed. This created a limited planning opportunity that has now ended.

Why We Don’t Provide Details Here: Gifting mistakes can be financially catastrophic. Federal rule changes could eliminate current opportunities with little warning.

For these reasons, gifting strategies should only be implemented with proper legal guidance to avoid costly mistakes when long-term care is needed most.

THE MAJOR ISSUE REGARDING A MARRIED COUPLE: KEEPING AS MUCH AS IS POSSIBLE OF THE INCOME OF THE ILL SPOUSE.

As mentioned above, the non-exempt assets of a spouse cannot exceed the CSRA. Getting the countable assets of a spouse down to that limit is the key to planning for a married couple. That is a key part of how we can help.

Another issue is whether the income of the spouse in the nursing home will go to the well spouse or to the “share of cost” of the ill spouse in the nursing home. There is something called the minimum monthly maintenance needs allowance (”MMMNA”). The MMMNA for 2026 is $4,066.50.

We can petition the court under Probate Code section 3100 for spousal support (a “‘3100″ Petition”) to increase these allowances so that the spouse at home can keep all or substantially all of the income of both spouses.

Time-Sensitive Opportunity: Court petitions for increased allowances are often more successful when filed before or shortly after Medi-Cal application. Waiting too long can limit your options and reduce the amounts a court will approve. THIS IS A VERY IMPORTANT SERVICE WE CAN PROVIDE.

Another issue is that the assets the well spouse acquires after the ill spouse qualifies for Medi-Cal do not cause a subsequent ineligibility. An inheritance is a good example.

Example: Protecting a Seven-Figure Estate

A married couple sought our help when the husband required skilled nursing care. At the time, they owned:

An above-average single-family residence (exempt)
A $300,000 IRA in the wife’s name
A $500,000 IRA in the husband’s name
Approximately $350,000 in liquid savings

Despite these assets, we were able to qualify the husband for long-term care Medi-Cal.

The Strategy

Through careful Medi-Cal planning and a successful court 3100 petition, the wife retained:

Her Social Security income
The husband’s Social Security income
Distributions from retirement accounts

As a result, the wife retained a monthly income well in excess of the standard Minimum Monthly Maintenance Needs Allowance.

The Result

The husband received the skilled nursing care he required, while the wife preserved her home, her income, and her long-term financial security.

Specialized Medi-Cal planning in California can protect significant assets that would otherwise be lost to nursing home costs. Every case depends on individual facts, but this example illustrates how proper legal strategy can significantly change the outcome.

Can Medi-Cal Take My Assets After I Am Gone? AVOIDING MEDI-CAL RECOVERY.

It is a common misconception that if an individual receives aid from Medi-Cal, they will “take your home” or “put a lien on your home.” However, Medi-Cal can recover for what they have expended after a single person has passed away. Note they cannot recover any amount from a surviving spouse. They also cannot recover against a child who is blind or disabled (or a minor). Medi-Cal cannot recover against an IRA or other retirement plan or life insurance. Beginning in 2017, Medi-Cal can only recover for long term care expenses (such as nursing home expenses) only in a probate court proceeding; hence, they cannot claim against living trusts and other common estate planning devices.

Example (Hypothetical): John owns a $400,000 home and receives $80,000 in nursing home care from Medi-Cal. If his home passes through probate at death, Medi-Cal can recover the full $80,000. If properly structured in a living trust, the home typically passes to his children without recovery.

The difference: Proper planning protects $80,000 for his family.

THEREFORE, IT IS VERY IMPORTANT IF YOU HAVE MEDI-CAL PAY FOR SKILLED NURSING OR OTHER LONG TERM CARE TO HAVE SUBSTANTIALLY ALL YOUR ASSETS OWNED BY YOUR LIVING TRUST. WE CAN HELP YOU SET THAT UP, IF NEEDED.

Are Some Loopholes Closing? Do I Need to Consider Acting Now?

The DRA, the Deficit Reduction Act, was signed by President Bush in 2006. For example, it limits home equity to $500,000 ($750,000 if the state so mandates, as California has done). It does away with rounding down on partial months of ineligibility. It tightens up some on annuities.

However, California has yet to implement the DRA. More than 19 years have passed and Medi-Cal has implemented little of the DRA. In 2008 the State Legislature passed a law implementing the rules. However, this is subject to adoption of final regulations. Regulations were proposed in 2012. However, over a decade later they have not been finalized. One suspects they may never be finalized. However, we still need to keep that possibility in mind, and so we should consider what can and should be done now before it is too late.

Conclusion

Your Next Steps

Whether you’re planning ahead or facing an immediate need, time is often your most valuable asset in Medi-Cal planning.

For Advance Planning:
– Review your current assets and long-term care insurance.
– Consider whether strategic gifting makes sense for your situation.
– Ensure your estate plan is structured to avoid Medi-Cal recovery.

For Immediate Needs:
– Apply for Medi-Cal while exploring asset protection options.
– Consider spousal resource allowance increases if married.
– Act quickly — some planning options disappear once care begins.

For Current Recipients:
– Review your assets before your next annual renewal
– Ensure compliance with new 2026 limits
– Don’t risk losing benefits by missing deadlines

The time is now to consider whether or not to take action to qualify for Medi-Cal to pay for long term care in a nursing home or In Home Supported Services. The window of time to give away certain assets and take other actions may be limited.

Contact Us Today

At Staker Rodriguez Law LLP, we do not just explain the rules; we build a shield around your family’s legacy. Whether you are applying for the first time or facing a 2026 Redetermination, we can help you rearrange your assets rather than losing them to the costs of long term care or recovery by the state.

We’ve helped many California families preserve their assets while securing the care they need.

Call us at (805) 482-2282 or e-mail us.

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