California Medicaid (Medi-Cal) Income & Asset Limits for Nursing Homes & Long Term Care

California Medicaid (Medi-Cal) Definition

Medicaid is a health care program for low-income individuals of all ages. While there are multiple coverage groups, our focus is on Medicaid long-term care (LTC) eligibility for California senior residents (aged 65 and over). In addition to nursing home care and assisted living services, California Medicaid, also called Medi-Cal, pays for many non-medical support services that help frail seniors live in their homes. There are three categories of Medi-Cal programs though which California seniors may receive long-term care.

1) Institutional / Nursing Home Medicaid – An entitlement; anyone who is eligible will receive assistance. Services are provided in Medicaid-certified nursing homes.

2) Medicaid Waivers / Home and Community Based Services (HCBS) – Not an entitlement; the number of participants is limited and waiting lists may exist. Benefits are intended to delay nursing home admissions and may be provided at home, adult day care, or in assisted living. More on waivers.

3) Regular Medicaid / Aged, Blind and Disabled (ABD) – An entitlement; meeting eligibility requirements ensures services will be provided. While Regular Medicaid is not Long-Term Care Medicaid, some long-term care benefits, such as personal care assistance or adult day care, may be available. More on Regular Medicaid vs. LTC Medicaid.

While Medi-Cal is state and federally funded, the state of California administers its program within federally set parameters. The California Department of Health Care Services (DHCS) is the administering agency.

Medi-Cal Income & Assets Limits for Eligibility

The three categories of Medi-Cal programs providing long-term care have differing financial and medical (functional) eligibility criteria. Further complicating financial eligibility is that income limits change annually, vary with marital status, and California offers multiple pathways towards eligibility.

The table below provides a quick reference to allow seniors to determine if they might be immediately eligible for long-term care from a Medi-Cal program. Alternatively, one can take the Medicaid Eligibility Test.  IMPORTANT: If one does not meet all the criteria below, it does not mean one is ineligible or cannot become eligible for California Medicaid. More.

Income Definition & Exceptions

Countable vs. Non-Countable Income
Nearly all income that a Medicaid applicant receives is counted towards the income limit. This includes employment wages, alimony payments, pension payments, Social Security Disability Income, Social Security Income, IRA withdrawals, and stock dividends. Nationally, Holocaust restitution payments are not counted as income. Furthermore, in CA, the VA Aid and Attendance Pension, which is above and beyond the Basic VA Pension, does not count.

Treatment of Income for a Couple
When just one spouse of a married couple applies for Nursing Home Medicaid or a HCBS Medicaid Waiver, only the income of the applicant is counted. Furthermore, the non-applicant spouse may be entitled to a Spousal Income Allowance from their applicant spouse. This is called a Monthly Maintenance Needs Allowance (MMNA) and is said to be the minimum amount of monthly income a non-applicant spouse requires to avoid spousal impoverishment. In 2025, the MMNA in CA is $3,948 / month. If a non-applicant’s monthly income is under $3,948, income can be transferred to them from their applicant spouse, bringing their income up to this amount. A non-applicant spouse whose own monthly income is $3,948 or more is not entitled to a MMNA / Spousal Income Allowance.

Income is counted differently when only one spouse applies for Regular ABD Medicaid; the income of both spouses is calculated towards the applicant’s income eligibility. Note: There is no Monthly Maintenance Needs Allowance for a non-applicant spouse. More on how Medicaid counts income.

Asset Reimplementation, Definition & Exceptions

Reimplementation of the Asset Limit
The asset limit is being reimplemented (back to the 2022 levels) effective 1/1/26.

New Applicants
Seniors who submit a Medi-Cal application prior to 1/1/26 will not have to provide verification of their assets. This is true even if the application is not approved until 1/1/26 or after. For applications submitted on or after 1/1/26, asset information must be provided.

Current Medi-Cal Recipients
Current senior Medi-Cal beneficiaries do not have to immediately meet the newly reinstated asset limit when it becomes effective on 1/1/26. Instead, they must meet the asset limit at whichever date comes first in 2026.
1) One’s annual Medi-Cal redetermination, during which the Medi-Cal agency determines if one is still eligible for Medi-Cal benefits.
2) A “change in circumstance” redetermination, given asset information was previously obtained and can be verified “without beneficiary contact” (called ex parte review). A change in circumstance, which must be reported to Medi-Cal within 10 days, is any change that impacts Medi-Cal eligibility (i.e., increase in income, receipt of a cash inheritance, change in household size). Note: An increase in Social Security does not trigger a change in circumstance redetermination.

For annual redeterminations on or after 1/1/26, if requested asset information is not provided or if one has assets over Medi-Cal’s asset limit, they will have 90 days to provide asset information or “spend down” assets. This is called a 90-day cure period. If determined eligible, they will stay on Medi-Cal.

Countable vs. Non-Countable Assets
Medi-Cal eliminated their asset limit effective 1/1/24, but will be reinstating it effective 1/1/26. Until this time, the value of one’s assets have no impact on eligibility. Income produced from some assets, however, may count towards Medi-Cal’s income limit.

Beginning 1/1/26, some assets will be “countable” (non-exempt), and the value of these assets will be calculated towards the newly reinstated asset limit. These assets include cash, cryptocurrency, stocks, bonds, mutual funds, bank accounts (i.e., checking, savings, money market), and real estate other than one’s primary home. Other assets are non-countable (exempt) and include personal belongings, household furnishings, an automobile, irrevocable burial trusts, and generally one’s home. In California, an applicant’s retirement account (i.e., IRA, 401K) is also exempt, given the account is “paying out”. This means that one is withdrawing the Required Minimum Distribution (RMD), or if under 73 years old, they are withdrawing a minimum payment of principal and interest. A non-applicant spouse’s IRA / 401K is automatically exempt.

Treatment of Assets for a Couple
With the elimination of the asset limit on 1/1/24, the value of a couple’s assets (regardless of value), are disregarded until the asset limit is reimplemented on Jan. 1, 2026. However, if an asset produces income, it may count towards Med-Cal’s income limit.

When Medi-Cal’s asset limit is reimplemented on 1/1/26, all assets of a married couple will be considered jointly owned (regardless of the Medi-Cal program for which one or both spouses is applying). There is, however, a Community Spouse Resource Allowance (CSRA) that protects a larger amount of a couple’s countable assets for the non-applicant spouse of a Nursing Home Medicaid or Medicaid Waiver applicant. In 2026, it is estimated that the community spouse (non-applicant spouse) will be able to keep up to approximately $160,000 of the couple’s countable assets. Note: There is no CSRA for Regular Medicaid.

Medicaid’s Look-Back Rule

Asset Transfers Prior to 1/1/24
The Look-Back Period is still relevant. On 1/1/24, California’s Look-Back Period was the 30-month period that immediately preceded the date a nursing home resident submitted a Medi-Cal application or the date a Medi-Cal beneficiary was admitted to a nursing home. For each subsequent month, the “look back” shortens by one month, until 7/1/26, there will no longer be a Look-Back Period for assets transferred prior to 1/1/24. During the “look back”, Medi-Cal scrutinizes all asset transfers, looking for assets that were gifted (including assets that were sold for under fair market value). California, however, permitted “strategic gifting” prior to 1/1/24. This allowed one to gift up to the average monthly private pay rate for nursing home care per day. In 2025, the average private pay rate is $13,656 / month, and therefore, one could have gifted up to this amount per day without violating the Look-Back Period. Note: The Look-Back Rule does not apply to persons applying for Regular Medicaid or Medicaid Waivers.

Persons who violate the Look-Back Period are penalized with a Penalty Period of Medicaid ineligibility up to 30 months from the date the disqualifying asset transfer was made. The last date in which one can be penalized is June 2026.

Asset Transfers On or After 1/1/24 – 12/31/25
Medi-Cal’s Look-Back Period became obsolete on 1/1/24. Although the Look-Back Period will be reinstated on 1/1/26, no asset transfers made in 2024 nor 2025 will violate Medicaid’s Look-Back Period.

Asset Transfers On or After 1/1/26
Medicaid will be reinstating their Look-Back Period effective 1/1/26 for Nursing Home Medicaid. Gifting assets or selling them for under fair market on or after this date could cause one to be penalized with a period of Medicaid ineligibility. However, California Medicaid will only penalize asset transfers that are greater than the monthly average private pay rate for nursing home care, which in 2025, is $13,656. It is anticipated that this amount will increase in 2026.

Additionally, persons will be able to gift assets without violating the penalty period if their total assets are at or under Medi-Cal’s asset limit. For example, for a single individual, the applicant asset limit will be $130,000. Say one has $120,000 in assets and gifts $40,000 to their child. This would not violate the Look-Back Rule since their assets were already under the $130,000 limit.

To be clear, the Look-Back Period will not apply to persons applying for HCBS Waivers or Regular Medicaid.

California Medicaid Home Exemption Rules

On or after 1/1/26, a Medi-Cal applicant’s / beneficiary’s home will automatically be exempt from Medi-Cal’s asset limit if their spouse, child under 21 years old, or permanently blind or disabled child (of any age) live in it. If this is not the case, and the applicant does not live in the home, they must have Intent to Return home. Note: California is the only state that does not have a home equity interest limit for home exemption. Other exemptions exist.

Even though one’s home will generally be exempt from Medi-Cal’s newly reinstated asset limit, it is not exempt from Medi-Cal’s Estate Recovery Program. Following a long-term care Medi-Cal beneficiary’s death, California’s Medicaid agency attempts reimbursement of care costs through whatever estate of the deceased still remains. This is often the home. Without proper planning strategies in place, the home will be used to reimburse Medicaid for providing care rather than going to family as inheritance.

Medical / Functional Need Requirements

An applicant must have a medical need for Medicaid long-term care. For Nursing Home Medicaid and HCBS Medicaid Waivers, a Nursing Facility Level of Care (NFLOC) is required. Furthermore, certain benefits may have additional eligibility requirements specific to that benefit. For example, for a waiver to cover the cost of home modifications, an inability to safely live independently without modifying the home might be required. For long-term care services via the Regular Medicaid program, a functional need with Activities of Daily Living (ADLs) is required, but a NFLOC is not necessarily required.

Qualifying When Over the Limits

For elderly California residents (aged 65+) who do not meet the income eligibility requirements above, or will not meet the soon to be reinstated asset limits (eff. 1/1/26), there are other ways to qualify for long-term care Medicaid.

1) Medically Needy Pathway – CA has an Aged, Blind and Disabled – Medically Needy Program (ABD-MN) that allows persons who have income over the Medicaid limit to become income-eligible. This program is applicable for ABD Regular Medicaid and HCBS Medicaid Waivers. Seniors who have “excess” income become eligible for Medicaid services by paying a “Share of Cost” (SOC). Essentially, a predetermined Maintenance Need Allowance (MNA) is deducted from one’s countable monthly income, determining one’s SOC. In 2025, the MNA is $600 for an individual and $934 for a married couple. Also called a Spend Down program, one’s “excess income,” the amount that is determined as one’s cost of share, is used to cover medical expenses. Once one has paid their SOC, they will be income-eligible for Medi-Cal for the remainder of the month.

2) Asset Spend-Down – Persons who will have countable assets over Medi-Cal’s asset limit can become asset-eligible by “spending down” excess assets on non-countable ones. This includes making home improvements (i.e., replacing a leaky roof, updating the heating/plumbing), home modifications (i.e., wheelchair ramps, roll-in showers, and stair lifts), vehicle modifications (i.e., wheelchair lifts, adaptive control devices, and floor modifications to allow one to drive from a wheelchair), prepaying funeral and burial expenses, and paying off debt. Beginning Jan. 1, 2026, Medi-Cal will be reimplementing a Look-Back Period for assets transferred on or after this date. When “spending down”, it is best to keep documentation of how assets were spent as evidence this rule was not violated.

3) Medicaid Planning – Many persons considering Medi-Cal are “over-income”, or will be “over-asset” with the reimplementation of the asset limit on 1/1/26, but still will not be able to afford their cost of care. For persons in this situation, Medicaid planning exists. By working with a Medicaid Planning Professional, families can employ planning strategies to help them become Medicaid-eligible. Medi-Cal Planners can help ensure a non-applicant spouse of a Nursing Home Medicaid or HCBS Waiver applicant receives the highest Spousal Needs Allowance as possible, as well as assist the applicant in lowering their Share of Cost. They can also assist an applicant in lowering their countable assets without violating Medi-Cal’s Look-Back Period, as well as implement planning strategies to protect their assets from Medicaid’s Estate Recovery Program, preserving assets as inheritance for loved ones instead. Connect with a Certified Medicaid Planner.

Specific California Medicaid Programs

In addition to paying for nursing home care, Medi-Cal offers the following programs / HCBS Waivers relevant to the elderly that assist them in living in their homes or in assisted living residences.

1) In-Home Supportive Services (IHSS) – Provides personal care and homemaker services to individuals in their homes. Family members, including spouses, can be hired as personal care providers.

2) Medi-Cal Assisted Living Waiver (ALW) – Though not available statewide, this program helps to pay for services and supports in assisted living, including memory care. There is currently a waitlist for participant enrollment.

3) Community Based Adult Services (CBAS) Program – Provides persons with daytime care and supervision in adult day health care centers certified as CBAS centers. There are CBAS centers in approximately 28 CA counties.

4) Multipurpose Senior Services Program Waiver (MSSP) – Provides California seniors with assistance for home modifications, personal emergency response services, homemaker services, personal care assistance, and other in-home supports. This program also helps persons transition back into the community from a nursing home.

5) Home and Community-Based Alternatives (HCBA) Waiver – Provides similar services to MSSP, but is intended for medically fragile and / or technology dependent persons.

6) Program of All-Inclusive Care for the Elderly (PACE) – Combines the benefits of Medicaid, including long-term care services, and Medicare into one program. Additional benefits, such as dental care and eye care, may be available.

7) CalAIM’s Enhanced Care Management (ECM) & Community Supports Benefits – Through California Advancing and Innovating Medi-Cal (CalAIM), Medi-Cal Managed Care Plans (MCPs) provide ECM for persons in a high-needs group. This includes seniors who are at risk of nursing home admission and eligible for long-term care, as well as current nursing home residents who wish to return home. Via ECM, all of one’s care needs and services are coordinated. MCPs may also offer Community Supports, such as Nursing Home Transition and Diversion to Assisted Living. Unlike with the Assisted Living Waiver, participant enrollment slots are not limited.

8) Money Follows the Person (MFP) – Also called California Community Transitions (CCT) in CA. This federal program helps institutionalized persons who are eligible for Medicaid to transition back home or into the community.

How to Apply for California Medicaid

CA Seniors can apply for a long-term care Medicaid program online at Covered California, by calling 1-800-300-1506, or by contacting their local county Department of Social Services office. Seniors who require Home and Community Based Services (HCBS) must first apply for Aged, Blind and Disabled Medicaid. Once enrolled, they apply for HCBS by completing the assessment and enrollment process. The application process may vary based on the program for which one is applying.

It is vital that Medi-Cal applicants be certain that all eligibility requirements are met prior to applying for benefits. Elderly CA residents who are over the income limit, or are unsure if they are, should consider Medicaid planning for the best chance of acceptance into a Medicaid program. Familiarizing oneself with general information about the application process for long-term care Medicaid can be helpful.