Understanding Medi-Cal’s Income-Based Criteria for Enrollees

TL/DR –

Medi-Cal, California’s Medicaid program, has eliminated its asset limit for enrollees and now only considers applicants’ income when determining financial eligibility. Previously, anyone with more than $2,000 in assets, including cash savings, was ineligible for Medi-Cal. The elimination of the asset test has reduced the financial and health insecurity for Californians and is expected to make more than 30,000 low-income residents eligible to enroll in the program.

Medi-Cal Shifts from Asset to Income-based Eligibility

Long-time volunteer Maria, upon receiving an unexpected inheritance of $80,000, was faced with the reality of losing her eligibility for Medi-Cal, California’s Medicaid program for low-income individuals. Earlier, anyone with more than $2,000 in assets, including cash savings, was ineligible to participate in the program. This created a financial and health crisis for those in Maria’s situation. California Health Advocates helped Maria and others like her navigate this tricky situation.

Elimination of Asset Limit for Medi-Cal Enrollees

As of January 1, 2024, Medi-Cal no longer considers assets when assessing financial eligibility for benefits, instead focusing solely on the applicants’ income. This is a significant shift from the asset test initially applied to all Medi-Cal enrollees, which was gradually reduced over the years, leaving only the elderly, the disabled, and those in long-term care facilities affected.

A two-phase process for eliminating the asset test started with Governor Gavin Newsom signing Assembly Bill 133 into law in 2021. This increased the individual asset limit from $2,000 to $130,000. Michael Guerrero, CEO of Eldercare Resource Planning, notes that this made more than 12,000 individuals newly eligible for Medi-Cal.

Asset Limit Completely Removed

The second phase began in 2024, completely doing away with asset limits, a first in the nation. This means those seeking long-term care services due to age or disability will not be penalized for having savings. Although the exact number of newly eligible participants due to this change is still unknown, the state estimates that around 30,000 low-income Californians may be able to enroll.

Impact of Removing Asset Test

Elimination of the asset test provides financial security to enrollees and reduces administrative burdens. It simplifies eligibility requirements and makes the application and renewal process more efficient. It also helps to prevent situations in which individuals were either denied due to assets like IRAs or told they had to liquidate and spend them.

Some concerns have been raised about potential backlogs or overcrowded service providers due to increased Medi-Cal applications. But advocates like Huyenh-Cho from Justice in Aging believe that the unchanged income limit, which individuals must still fall below to qualify, will prevent a surge in new enrollees.

Dispelling the Millionaire Myth

There are concerns that removing the asset test will be exploited by wealthy individuals. However, as investment distributions from large amounts of assets are unlikely to meet the low-income requirements for full-scope Medi-Cal, the possibility of the wealthy taking advantage of this change is small. Those who will benefit the most are working-class Californians who were previously on the threshold of eligibility.

Future Improvements for Medi-Cal Participants

While the removal of the asset test is a significant step towards health equity for older and disabled Californians, advocates believe there remains work to be done. The focus now shifts to education about enrollment steps, Share of Cost coverage, and provider limitations. Advocates also hope for reform in the Share of Cost rules, which have been a problem for Californians needing Medi-Cal covered services.

Despite the remaining hurdles, advocates agree that removing the asset test empowers Californians to live better and more secure lives, ensuring a bright future for Medi-Cal beneficiaries.

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