Medicaid Long-Term Care in California: How Medi-Cal Pays

In a California nursing facility, Medi-Cal does not pick up the whole bill. A California nursing-facility resident who stays in long-term care for an entire calendar month keeps $35 a month for personal and incidental needs under Medi-Cal, and the rest of their countable income goes to the facility as a monthly share of cost. That is how the Department of Health Care Services describes the arithmetic in its own long-term care question-and-answer sheet.1

Medi-Cal is California's Medicaid program, and the rules that shape a long-term care case in 2026 are mostly dollars and dates: an asset limit that returned on January 1, 2026 and drops sharply on July 1, 2027, a separate home-equity bar, a 30-month look-back still phasing in, and a pair of spousal figures DHCS set for 2026 in a January letter. Where California's own sources stop, this guide says so.2,3

What Medicaid long-term care covers in California

Long-term care is not one program here. DHCS delivers home- and community-based services (HCBS) for older adults and people with disabilities through several distinct programs rather than one waiver, each with its own authority, lead agency, and access rules. Nursing-facility care is the other side of the same question, and California's 58 counties conduct the eligibility determinations either way.7,2 Which program pays changes several answers below: spousal protection reaches home care as well as institutional care, but in the spousal-impoverishment income calculation DHCS publishes for home- and community-based cases, there is no $35 personal needs allowance.3

Income and the monthly share of cost

DHCS's long-term care question-and-answer sheet states the institutional rule in one line: the nursing home resident is allowed only $35 for personal needs, and the remainder of countable income goes toward share of cost each month. California's statute describes the same situation in its own language. Section 14005.13(a) of the Welfare and Institutions Code, which exempts a portion of a resident's therapeutic wages, addresses an individual "residing in a long-term care facility [who] would incur a long-term care patient liability for services under this chapter due to income that exceeds that allowed for the incidental and personal needs of the individual." Read that citation with the bound the Legislature's own site prints on it: section 14005.13 sits on the conditionally operative track, operative on or after January 1, 2025 by its own provisions.3,1

What our sources settle, and what they do not

No California source behind this guide states a gross-income cap for institutional Medi-Cal, and none states that there is no such cap. Those are different things, and neither is a rule you can plan around. The same goes for a Qualified Income Trust, sometimes called a Miller Trust: nothing here says California requires one, and nothing here says it excuses one. So do not take either answer secondhand, including from us. Ask your county eligibility worker which income rule it is applying to the long-term care application, and get the answer and its authority in writing.3,4

The $35 personal needs allowance, and its bounds

The $35 belongs to a nursing-facility resident who will remain in long-term care for the entire calendar month, and it is fixed in title 22 of the California Code of Regulations, section 50605(a)(1) as that resident's maintenance need for personal and incidental needs. DHCS applies it as the amount the resident keeps.1 The federal floor underneath is a floor and not a ceiling: at least $30 a month for an aged, blind, or disabled institutionalized individual, and at least $60 for an institutionalized couple where both spouses are aged, blind, or disabled.8

A Supplemental Security Income (SSI) recipient in a nursing facility is on a different track. Where Medicaid pays more than half the cost of care and the stay covers a whole calendar month, the federal SSI benefit is limited to $30 per month plus any supplementary state payment, and with California's supplement the Title XIX Medical Facility standard effective January 1, 2026 is $62.00 for an individual and $124.00 for a couple.1

Before you do arithmetic at the kitchen table, one more limit: no California source here enumerates the full list of post-eligibility deductions applied to an institutionalized resident's income. Build a share-of-cost calculation from 42 C.F.R. section 435.725 and your county's own instructions, and do not assume a Medicare premium, another insurance premium, or a support obligation comes off the top until the county confirms it.3

Assets, the home, and the July 2027 step-down

Assembly Bill 116 (Chapter 21, Statutes of 2025) amended Welfare and Institutions Code section 14005.62 to reinstate the non-MAGI asset test no sooner than January 1, 2026, after two years without one: $130,000 for an individual, $195,000 for a couple, and $65,000 for each additional person, up to 10 people, and those figures run only through June 30, 2027.3,4

DHCS's Medi-Cal Changes page states, for this same population, that the limits hold through June 30, 2027, and that starting July 1, 2027 the limit is $21,000 for one person, $31,000 for two, and an added $1,550 for every extra person, up to 10. A household that spends down to the 2026 ceiling and stops would sit about six times over the limit the following July ($130,000 against $21,000).2

Per DHCS letter ACWDL 25-18 the Pickle, Disabled Adult Child, and Disabled Widow or Widower programs stay exempt from the asset test, their limits eliminated under a separate federal waiver authority. SSI-linked recipients stay under SSI's limits of $2,000 for an individual and $3,000 for a couple, which AB 116 did not change.4

The home is not counted, and is capped anyway

The principal residence is a non-countable asset for the test above, and it is separately capped by an equity limit. These are two different rules. Under Welfare and Institutions Code section 14006.15(b), amended by AB 116 and operative January 1, 2026, an individual is not eligible for Medi-Cal medical assistance for home and facility care if equity in the principal residence exceeds $750,000, an amount increased every year since 2011 by the consumer price index for all urban consumers and rounded to the nearest $1,000. California elected the higher of the two federal limits allowed by 42 U.S.C. 1396p(f): CMS sets the 2026 federal limits at a $752,000 minimum and a $1,130,000 maximum, and California is one of twelve states, counting the District of Columbia, applying the higher $1,130,000 level. So the number that governs a 2026 California case is that $1,130,000, not the $750,000 base the statute prints. Equity interest is the lesser of the most recent tax-assessed value or a qualified appraiser's value, less encumbrances of record.3

The equity limit does not apply while the individual's spouse, or a child who is under 21, blind, or disabled, is lawfully residing in the home, nor where eligibility was based on an application filed before January 1, 2006, and DHCS may waive it on demonstrated hardship. Further out, under Public Law 119-21, section 71108, beginning January 1, 2028 federal law bars Medicaid long-term services and supports where home equity on a non-agricultural lot exceeds $1,000,000, keeping the same family exceptions and the hardship waiver.3

Transfers and California's 30-month look-back

California's look-back period is 30 months, shorter than the federal look-back date of 36 months, or 60 months for any disposal of assets made on or after February 8, 2006 under 42 U.S.C. section 1396p(c)(1)(B)(i). In California, the maximum period of ineligibility is 30 months from the date of the transfer.3,5

The shielded window. Per DHCS letter ACWDL 25-18, counties shall not request verification, review electronic asset verification, or calculate any period of ineligibility for transfers made on or after January 1, 2024 through December 31, 2025, because the asset test did not apply during those months. The ramp. Beginning July 1, 2026, only the months after the asset test came back on January 1, 2026 have to be reviewed, and the number of months reviewed grows by one with each passing month, until the full 30-month review applies to long-term care applications and to members entering long-term care on or after July 1, 2028.3,5

A penalty is the uncompensated transferred value divided by the statewide Average Private Pay Rate for nursing-facility care, which DHCS publishes annually, with the updated figure for the calendar year typically available at the end of January. DHCS did not publish the 2026 rate in ACWDL 25-18, and no federal or California source behind this guide carries it, so no dollar divisor is printed here. Ask your county which rate it is applying before you estimate a penalty. Counties do not follow up when electronic asset verification shows transfers under that rate, or when the individual was within the asset limits at the date of transfer.3

Some transfers are exempt whenever they were made. Under 42 U.S.C. section 1396p(c)(2), a home may pass without penalty to the individual's spouse; to a child under 21, or of any age if blind or permanently and totally disabled; to a sibling with an equity interest who lived there at least one year immediately before institutionalization; or to an adult caregiver child who lived there at least two years immediately before institutionalization and, as the state determines, provided care that kept the individual out of an institution. States must also run an undue-hardship waiver process.5

Do not assume a home-care application escapes the look-back

ACWDL 25-18 says the look-back review happens when applying for Medi-Cal or entering a long-term care facility, that the penalty is a period of ineligibility for nursing facility level-of-care, and that the period of ineligibility does not apply to members enrolled in community-based Medi-Cal programs. That describes whom the nursing-facility penalty reaches, and it is written about members already enrolled in a community program. It is not a statement that a waiver applicant escapes the look-back. Confirm any past gift with your county eligibility worker.7

When one spouse enters care and one stays home

Under DHCS letter ACWDL 26-02, effective January 1, 2026 California's Minimum Monthly Maintenance Needs Allowance (MMMNA) is $4,067 per month, up from $3,948 in 2025, and starting January 1, 2026 the Community Spouse Resource Allowance is $162,660.00. DHCS rounds the federal maximum of $4,066.50 to the whole dollar. The MMMNA is the standard the county measures the at-home spouse's income against in setting the spousal income allocation, not a flat monthly payment, and when it does that measurement, amounts paid for Medicare and other health-insurance premiums are deducted from that spouse's gross income.3

DHCS publishes a single resource allowance and a single maintenance needs allowance for California, and ACWDL 26-02 publishes no California minimum resource allowance and no California maintenance needs floor. The minimum figures that circulate are the underlying federal section 1924 standards, not California's operative numbers.3

The allowance applies when the institutionalized spouse is in a skilled nursing facility, is on the waitlist for home- and community-based services, or is actively participating in a home- and community-based program. California extends these protections to home- and community-based services, including its Section 1915(c) waivers, under the Affordable Care Act's broadened definition of institutionalized spouse as implemented by DHCS letters ACWDL 17-25 and ACWDL 18-19. If you see Welfare and Institutions Code section 14005.41 cited as the authority, it is wrong: that section covers children's enrollment through the National School Lunch Program.3 Our California spousal impoverishment guide goes deeper.

Medicaid long-term care at home: California's HCBS options

Each program below is described the way its own agency describes it, including where those descriptions run out.7,9,10

The Assisted Living Waiver's 15 counties are Alameda, Contra Costa, Fresno, Kern, Los Angeles, Orange, Riverside, Sacramento, San Bernardino, San Diego, San Francisco, San Joaquin, San Mateo, Santa Clara, and Sonoma; outside them it is unavailable, and inside them slots go to Care Coordination Agencies as they open, with priority for institutionalized individuals. On MSSP, two California state agency pages disagree about the age floor and this guide does not pick one, so confirm with the MSSP site serving your county. And DHCS's PACE policy page does not say whether existing PACE organizations may keep enrolling participants during the pause, so ask one in your area.7,9

In-Home Supportive Services is also where California pays family. It is one of a small number of states permitting paid spousal caregivers in its main Medicaid personal-care program, through the IHSS-Plus Option under Section 1915(j).10 See our California IHSS guide. Services for Californians with developmental disabilities run separately, through the California Department of Developmental Services and its statewide network of 21 non-profit regional centers; no source behind this guide states that program's Medicaid authority, so start with your regional center rather than with an assumption about which waiver applies.7

How to apply for Medicaid long-term care in California

DHCS presents four ways to sign up: online through its partner websites, BenefitsCal or Covered California; by phone on 1 (800) 541-5555 or the local county office; in person at a nearby county office; or by mail, using an application downloaded from DHCS. Under 42 CFR 435.912 the county must determine eligibility within 45 days for most applicants and within 90 days on the basis of disability, 90 days being the federal outer cap; CMS revised that section effective July 31, 2026 and both standards survive at the new paragraph (c)(3). After approval, enrollees in managed-care counties choose a plan through Health Care Options at (800) 430-4263, and depending on the county must choose within 30 days or Medi-Cal assigns a plan.11

Coming from a Medicare rehab stay. Medicare Part A covers the skilled-nursing stay first, but generally only after a qualifying 3-day inpatient hospital stay, and time under observation or in the emergency room before admission does not count toward those 3 days. The 3-day minimum may be waived for a beneficiary whose doctor participates in an Accountable Care Organization approved for a Skilled Nursing Facility 3-Day Rule Waiver, or in a Medicare Advantage plan that waives it. Medicare Part A skilled-nursing coverage then runs at no coinsurance on days 1 through 20, $217 a day on days 21 through 100 in 2026, and full cost from day 101.12 File the Medi-Cal application before those days run out.

Retroactive coverage, and the January 2027 narrowing

Federal law requires every state to make medical assistance available for covered services furnished in or after the third month before the month of application, if the person would have been eligible then; 42 CFR 435.915(a) puts eligibility in effect no later than that third month. Because these applications are often filed weeks after admission, that window is what lets a facility bill Medi-Cal for the pre-application period. It narrows on a fixed date: section 71112 of Public Law 119-21 shortens it for applications made on or after January 1, 2027, to two months before the application month for most enrollees and one month for the Affordable Care Act adult expansion group. If an admission straddles the end of 2026, the filing date matters.13

Renewals: the aged and disabled rule is now different

DHCS tells members their Medi-Cal is looked at once per year, and that if it is less than 90 days from the date on a renewal letter, returning the form or the missing information keeps coverage without a new application; after 90 days a new application is required. The federal rule then changed on July 31, 2026 in a way that matters for exactly this population. CMS revised 42 CFR 435.916 in full, and the once-every-12-months-and-no-more-frequently rule now sits at paragraph (a)(1) and applies only to beneficiaries using modified adjusted gross income methods. Those excepted under section 435.603(j), the aged, blind and disabled population most long-term care members belong to, fall under new paragraph (b): redetermination at least every 12 months, renewal without asking the member only if sufficient information is available, and pre-populated forms the agency may adopt rather than must.11

If you are denied

A denial, termination, or reduction arrives as a Notice of Action, and the member has 90 days from the notice to request a State Hearing at the California Department of Social Services State Hearings Division. A managed care member must first exhaust the plan's internal appeal, which the plan reviews and decides in writing within 30 days, then request the hearing within 120 calendar days of that decision; a fee-for-service member may request one directly inside the 90-day window. Requesting by the effective date of the action where 10-day advance notice is required, or otherwise within 10 days of the date of the notice, keeps benefits running as Aid Paid Pending.14 Our California appeals guide has the filing channels.

Estate recovery after a long-term care recipient dies

Federal law requires every state to seek recovery from the estate of a recipient who was 55 or older when they received nursing facility services, home and community-based services, and related hospital and prescription drug services, and from a recipient of any age who was permanently institutionalized. Recovery may be made only after the death of a surviving spouse, and only when no surviving child is under 21, blind, or permanently and totally disabled. Each state must establish procedures to waive recovery for undue hardship.5

California narrowed its program well below that ceiling. Welfare and Institutions Code section 14009.5, in the text added by SB 833 and applying only to members who die on or after January 1, 2017, defines the estate as the assets in the individual's probate estate that federal law requires be subject to a claim. California did not adopt the optional expanded, non-probate definition, and DHCS states repayment is limited to probate assets owned by the beneficiary at death. A claim is prohibited where there is a surviving spouse, registered domestic partner, child under 21, or child who is blind or disabled. A homestead of modest value, meaning fair market value 50 percent or less of the average price of homes in the county as of the date of death, is a ground for a substantial-hardship waiver DHCS is directed to grant subject to federal approval; it is not automatic, and you have to ask for it, on DHCS form 6195, within 60 days of the date on the claim letter.6 Our California estate recovery guide walks the notice and claim timelines.

Dates to plan around

On that second row: DHCS submitted a CalAIM renewal application to CMS on May 11, 2026 seeking a five-year renewal that would run the demonstration through December 31, 2031, and CMS has not approved it, so treat any CalAIM-delivered service, CBAS included, as running on the current term until it does.15

The bottom line

Any spend-down plan built on today's $130,000 and $195,000 asset limits needs June 30, 2027 written into it: starting July 1, 2027 those limits become $21,000 and $31,000.2 On income treatment, the sources here give you the share-of-cost mechanic and not a cap, so get your county's answer and its authority in writing rather than a rule of thumb.3 For transfers, trusts, and complex spousal cases, get advice from an elder-law attorney who can read your county's own instructions.

Where to get help

Learn More

Find personalized help navigating Medi-Cal long-term care in California at brevy.com.

The information on Brevy.com is for educational purposes only and is not a substitute for professional legal, financial, or medical advice. Rules vary by state and program and change frequently. Always verify with the relevant agency or a qualified professional. Brevy is not a law firm, financial advisor, or healthcare provider.