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Millions of Californians who rely on Medi-Cal and in-home assistance services may lose eligibility under proposals that require recipients to prove their assets under $2,000.
Gov. Gavin Newsom’s recently revised budget proposal highlighted a $37.6 billion increase in MEDI-CAL-related funding costs between 2024 and 2025, compared to $17.1 billion for 2014-2015.
The amount needed to fund the program is expected to continue to increase over the next few years. The budget proposal says costs are being raised by a surge in registration, pharmacy costs and higher managed care costs.
Medi-Cal Caseload reported an increase in recipients of 12.7 million between 2019 and 2020 between 2024 and 2025.
Medi-Cal is the state’s health care program that offers free or low-cost health insurance for qualified individuals, especially low-income adults and families, the elderly and those with disabilities. Home support services provide home support to eligible elderly people, blind and disabled people as an alternative to home care.
Newsom proposed to tackle rising costs of the program by reintroducing what is called “asset tests” to limit eligibility for Medi-Cal and in-home assistance services programs.
What is “asset test”?
For decades, low-income elderly people and people with disabilities have had to pass the “asset test” to qualify for Medi-Cal and the Home Support Services Program. This means that if one applicant was valuing assets of more than $2,000, they were unable to qualify. The couple’s limit was $3,000.
To determine if someone has $2,000, the state will look at a person’s bank account, the amount of cash they have on hand, and whether they have a second vehicle among other analyses.
Testing was eliminated in 2024, allowing all income-qualified people, regardless of their assets, to apply to Medi-Cal’s Elderly and Disabled Programs, Med-Care Savings Programs and Long-Term Care Programs.
What is the California Governor suggesting?
Newsom proposes restoring the “asset test” and includes the value of a major home, vehicle, or retirement fund for both Medi-Cal and the Home Support Services Program.
Reviving the test will include an estimated $94 million this year, $540 million next year, and $791 million per year since then, according to California Healthcare Services.
If approved, the Asset Test will take effect on January 1, 2026.
What do health and disability advocates say?
Disability and health advocates have criticised the governor’s proposal, calling the nonprofit rights for disabled people California “sacrificing the health and human welfare of California, especially the disabled, the poor and the elderly.”
“California and many others have fought tirelessly for years to eliminate this asset limit and realized it was a deeply inhumane and punitive approach. This change came into full force in 2024.
Restoring the “asset test” would “people lose compensation and push the elderly and people with disabilities into extreme poverty,” said a health advocate for the nonprofit California.
The organization says that individuals who lose compensation as a result of the proposed policy change will ultimately “have “are again eligible for Medi-Cal after exhausting the resources they have.”
“The costs to the state when they regain eligibility as a result of losing access to care may require full-time nursing facility care as the condition may worsen and the ability to live in home,” the organization said in a statement.
Newsom defended the proposed budget cuts. “None of these are jobs you enjoy, but you have to do it. We have to take responsibility. We have to be accountable. We have to balance our budget.”
The office of legislative analysts determined that in December 2024, seniors made up for just under 10% of Med-Cal registrations.
The largest category of MEDI-CAL enrollees is family, and subsequently, children without children between the ages of 19 and 64 have been qualified by the Patient Protection and Affordable Care Act, the Elderly, Disabled, Children with Child Health Insurance Program (CHIP) and other enrollees.
Family members and enrollees of the Patient Protection and Affordable Care Act account for approximately a quarter of MEDI-CAL enrollments.
The number of senior enrollees is relatively low compared to other groups, but the state spends a lot of money on them, with annual costs per enrollees being around $15,000 compared to $8,000 in other Caseload categories.
To fund most MEDI-CAL programs for families, seniors, and people with disabilities, the federal government offers 50% games compared to other programs, such as the Affordable Care Act and Children’s Health Insurance Program, which earns 90% and 65% enhanced matches, respectively.
“We expect healthcare costs to be higher as we get older, but older people are increasingly costing states due to standard federal reimbursement rates,” according to the report.
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