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.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 the 2026 spousal figures. 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) 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 determine eligibility either way.7,2 Which program pays changes several answers below: spousal protection reaches home care as well as institutional care, but the spousal-impoverishment income calculation DHCS publishes for home- and community-based cases differs in six respects, the first being that there is no $35 personal needs allowance.3

Income and the monthly share of cost

DHCS states the institutional rule in one line: the 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, at Welfare and Institutions Code section 14005.13(a), which addresses a resident 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."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 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 or that it excuses one. Ask your county eligibility worker which income rule it is applying, 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. For a resident in long-term care for only part of the month, the maintenance need is the ordinary community figure under section 50603 instead, so a mid-month admission or discharge is not held to $35.1 The federal floor underneath is a floor, not a ceiling: at least $30 a month for an aged, blind, or disabled institutionalized individual, and at least $60 for an institutionalized couple.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, know that the $35 is one item on a list, not the whole of what a resident may keep. Welfare and Institutions Code section 14005.12 sets the maintenance-need deductions out cumulatively: personal and incidental needs (the $35 floor), the upkeep and maintenance of the home, the support of minor children or a disabled relative the resident regularly supported where there is no community spouse, the support of a community spouse and of dependents residing with that spouse, the community spouse monthly income allowance set at the maximum federal law permits, and a family allowance. For anything beyond that list, use 42 C.F.R. section 435.725 and your county's own instructions; no source here supports a deduction for court-ordered support.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 sets out the step-down that follows.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 And the limit is not a count of everything a family owns: DHCS lists the home you live in, one vehicle, household items, and some savings such as retirement accounts as assets that do not count.2

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 applies the higher one. 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, which section 14006.15(c)(3) defines by a list that is expressly not exhaustive and that reaches, among others, the family whose equity would have been under the cap had the cap been indexed to the California House Price Index. 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, but a period of ineligibility is neither automatic nor a denial of Medi-Cal. Every case must be reviewed for undue hardship before one is imposed, transfers of exempt assets are not penalized, no period may be imposed without approval from the DHCS Medi-Cal Eligibility Division, and counties may not issue a total denial: they grant restricted eligibility for nursing-facility level of care instead.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 January 1, 2024 through December 31, 2025, because the asset test did not apply then. The ramp. Beginning July 1, 2026, only months after January 1, 2026 are reviewed, and the number grows by one each month until the full 30-month review applies to 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, usually at the end of January. No source behind this guide carries a reliable 2026 rate, so 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. That is the exception, not the rule. Where the applicant was over the asset limits and transferred property above the rate, the county does follow up, and there is a presumption that assets an individual in long-term care transferred were transferred to establish eligibility. The presumption may be refuted with evidence that the transfer was made for some other reason, and that rebuttal is the family's remedy.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, and that the period of ineligibility does not apply to members enrolled in community-based Medi-Cal programs. That is written about members already in a community program. It is not a statement that a waiver applicant escapes the look-back, so 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. That $162,660 is not a renewal cap: ACWDL 26-02 applies it only to cases newly determined under spousal-impoverishment provisions from January 1, 2026 onward, and only to the initial month of eligibility. A case determined eligible before that date is not subject to it at the 2026 annual renewal, and DHCS says members may transfer more than $162,660 out of their name because the limit does not apply at renewal. Nor does anything here establish it as a figure that can never be exceeded; DHCS's own long-standing question-and-answer sheet describes the couple's allowance as the published amount or an amount set by court order or fair hearing, whichever is greater. 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, and no California minimum for either. 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, on the HCBS waitlist, or actively participating in an HCBS 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, implemented by DHCS letters ACWDL 17-25 and 18-19.3 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.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 open slots are released to Care Coordination Agencies monthly. The priority for institutionalized individuals belongs to the 7,000 expansion slots CMS approved in 2022, not to those monthly releases. A waitlist is not a closed door: to hold a place, contact a Care Coordination Agency in your county and complete the one-page Waitlist Request Form. On MSSP, two state agency pages disagree about the age floor, so confirm with the MSSP site serving your county. And DHCS does not say whether existing PACE organizations may keep enrolling 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 21 non-profit regional centers; 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 BenefitsCal or Covered California; by phone on 1 (800) 541-5555 or your county office; in person at a 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 90 days on the basis of disability; CMS revised that section effective July 31, 2026 and both standards survive. 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. Some Medicare Advantage plans, and Accountable Care Organizations approved for a Skilled Nursing Facility 3-Day Rule Waiver, drop that requirement. 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 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 changed on July 31, 2026 for exactly this population: the once-every-12-months-and-no-more-frequently cap at 42 CFR 435.916(a)(1) now applies only to beneficiaries using modified adjusted gross income methods. The aged, blind and disabled population most long-term care members belong to falls 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 bars recovery of medical assistance except in the cases it then requires: 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 whom the state determined, after notice and an opportunity for a hearing, could not reasonably be expected to be discharged and return home. Only assistance correctly paid is recoverable at all. 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, limits the estate to the individual's probate assets. California did not adopt the optional non-probate expansion, and DHCS states repayment is limited to probate assets owned 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, so 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 through December 31, 2031. CMS has not approved it, so treat any CalAIM-delivered service, CBAS included, as running on the current term.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: on July 1, 2027 those limits become $21,000 and $31,000.2 On income, 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.3 For transfers, trusts, and complex spousal cases, get 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.