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California has published the number that will reshape long-term care planning for thousands of Central Coast families, and it is not the number most people have been watching.
Since January 1, 2026, Medi-Cal has again counted what applicants own. The limit is $130,000 for one person and $195,000 for a married couple, with $65,000 added for each additional household member. That reinstatement drew most of the coverage, because the asset test had been eliminated entirely for the two years before it.
The larger change is still ahead. Starting July 1, 2027, the Department of Health Care Services sets the limit at $21,000 for one person and $31,000 for two, plus $1,550 for each additional household member. That is a reduction of roughly 84 percent, and it takes effect on a single date.
"People have been planning around the wrong deadline," said Julianna Malis, founder of Santa Barbara Estate Planning & Elder Law. "They heard the asset test came back in 2026 and figured they were fine at $130,000. Most of the families I meet in Santa Barbara are fine at $130,000. Almost none of them are fine at $21,000."
The whiplash is real, and it explains a lot of the confusion.
Before July 2022, the limit was $2,000 for an individual, a figure that had been frozen since the 1980s. In July 2022, the state raised it to $130,000. In January 2024, it eliminated the asset test altogether. In June 2025, citing the budget, the Legislature voted to bring it back at $130,000 effective January 1, 2026. The same budget set the July 2027 reduction.
Four changes in five years, Malis said, has left people reasonably unsure what rule applies to them.
"I have clients who got different answers from the county in 2023, 2024, and 2026, and all three answers were correct at the time," she said. "That is not a failure on their part. It is a moving target."
The asset test does not reach every Medi-Cal member. It applies to what the state calls non-MAGI programs, which cover people who qualify based on being 65 or older, having a disability, needing nursing facility care, or enrolling in Share of Cost Medi-Cal, a Medicare Savings Program, or the 250% Working Disabled Program. In-Home Supportive Services sits downstream of Medi-Cal enrollment, so it is affected as well.
Children and working-age adults who qualify under income-based rules are not subject to the limit.
What counts is narrower than people assume, and also broader. The home you live in is exempt. However, a $1M equity cap is coming in 2028 unless a spouse or minor or disabled child lives in the home. Bank accounts, certificates of deposit, brokerage accounts, second properties, additional vehicles, and cash value in life insurance generally count. So do digital wallet balances, which DHCS lists explicitly in its member materials.
Current enrollees are not asked to report assets on a fixed date. The test applies at the first annual renewal that falls on or after the effective date. That timing is why the July 2027 change will land on different households in different months, and why Malis says a renewal notice is worth opening carefully rather than filing away.
The planning problem is not the July 2027 date by itself. It is that the tools available before that date operate on a longer schedule than the calendar allows.
California reviews transfers made for less than fair market value during the 30 months before a long-term care application, a window shorter than the 60 months most states use. A transfer inside that window can trigger a period of ineligibility calculated by dividing the transferred amount by the state's average private pay nursing home rate, set at $14,440 per month for 2026.
The look-back is still filling in. Transfers made during the 2024 and 2025 no-asset-test window are permanently excluded from penalty under DHCS guidance issued in All County Welfare Directors Letter 25-18. Only transfers made on or after January 1, 2026 are reachable, and the window grows by one month each month until it reaches the full 30 months in 2028.
For Malis, that arithmetic is the whole story.
"Count forward from today and you get to July 2027 in nine months," she said. "Count forward thirty months and you are into 2029. The strategies that work are measured on the second clock, not the first. Families who start in the spring of 2027 will have a much shorter list of options than families who start now, and some of the best options will simply be off the table."
She is careful about what that does not mean. Giving money away is not a plan, and a transfer made at the wrong time or structured the wrong way can delay coverage rather than preserve it.
"The worst outcomes I see come from well-meaning advice at the kitchen table," she said. "Somebody adds a child to a deed or moves an account, and nobody runs the penalty math. Medi-Cal planning is one of the few areas where doing the right thing in the wrong order costs you years."
Her advice for Santa Barbara, Goleta, and Carpinteria families is practical and short.
Add up the countable assets honestly, leaving the primary residence out and including every account, policy, and second vehicle. Compare that total against $21,000 for an individual or $31,000 for a couple rather than against the current figure. Pull together the last two years of statements before anyone needs them, because documentation is the part that stalls applications. Note the month of the next Medi-Cal renewal. And treat any transfer made since January 2026 as a reviewable event, not a closed chapter.
Families planning further out have more structural options, including a Medi-Cal asset protection trust and, for a loved one with a disability, a special needs trust that preserves benefits eligibility. Whether either fits depends on the household, the timeline, and what the family is trying to protect.
What Malis does not want people to take away is that the situation is hopeless.
"The number is going to be small, and I am not going to pretend otherwise," she said. "But small is not the same as impossible. The families who do well are the ones who looked at this while they still had choices. The ones who struggle are the ones who called us the week a parent went into a facility."
Santa Barbara Estate Planning & Elder Law is a Santa Barbara firm handling estate planning, elder law, Medi-Cal planning, trust administration, special needs planning, and probate. Julianna Malis founded the firm in Santa Barbara and has practiced law for nearly 30years, with an LL.M. in taxation and estate planning and a J.D. from the University of the Pacific, McGeorge School of Law. The firm serves families across Santa Barbara, San Luis Obispo, and Ventura counties.
To learn more, visit sbelderlaw.com.
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