Eliminating the Medi-Cal Asset Test

Millions of California seniors and people with disabilities turn to Medi-Cal — known federally as Medicaid — for essential health care because ableist, ageist, racist, and classist policies and practices have blocked them from access to jobs, income, and wealth that can provide health coverage throughout their lifetimes. These Californians face further discrimination due to an asset test in Medi-Cal that unfairly applies only to people age 65 or older or who have a disability.¹ The asset test has strict limits and complex rules that discourage savings, weaken households’ financial stability, and benefit homeowners while putting renters at a disadvantage.

Medi-Cal limits seniors and people with disabilities to assets of no more than $2,000 for individuals and $3,000 for couples — a restriction that has not changed since 1989. Assets include cash on hand, money in a checking or savings account, a second car, and other resources. In addition, seniors must have household incomes that do not exceed 138% of the federal poverty line — $1,482 per month for a single adult or $2,004 for a couple as of 2021.

Policymakers have chosen to exempt certain assets from counting toward the limit. However, by treating resources differently, they have created an uneven playing field. In particular, a primary residence is exempted from the asset test, benefitting homeowners who may qualify for Medi-Cal even with substantial property wealth. In contrast, California renters — who may have other forms of wealth, such as cash savings — do not benefit from significant exemptions. They may be compelled to “spend down” much of their savings to qualify for Medi-Cal — money they could have used for other purposes such as moving costs, emergency expenses, and financing their retirement.

Among seniors who are income-eligible for Medi-Cal, nearly 2 in 3 Asian and Black Californians live in renter households, as do more than half of Latinx and other seniors of color. Homeowners are disproportionately white and renters are disproportionately Californians of color due to the legacy of racist policies and practices in housing, education, and employment.

State policymakers can eliminate the asset test and help to advance health equity for all Californians. Nine states plus Washington D.C. have increased their Medicaid asset limits, and Arizona abolished its asset test entirely. California’s Legislature has taken similar action to eliminate or increase asset limits in other support programs and can build upon progress made to help families and communities lead healthy lives.

Support for this Fact Sheet was provided by the California Health Care Foundation.

As families across California struggle with COVID-19, it is increasingly critical that children have the resources they need at birth to lay the foundation for lifelong well-being.¹ Assets such as family, health, and financial resources are strongly associated with child health and resilience, and with fewer harmful experiences such as involvement in the child welfare system.² When children are exposed to adverse experiences and toxic stress, early intervention tools like evidence-based home visiting can reduce or prevent negative outcomes.³ Home visitors, who are often social workers or nurses, provide parenting support and other assistance that can enhance child and maternal health and improve child development.

However, even before the COVID-19 crisis, too few California children were receiving home visiting support. In the 2018-19 state fiscal year, 41,800 children received federally and locally funded evidence-based or evidence-informed home visits, compared to the estimated 145,800 children ages 0 to 2 who would most likely benefit from such services.⁴

Now, with families facing significant long-term hardship due to the pandemic and recession, home visitors continue to provide critical support by connecting families to supportive services.⁵ State policymakers should provide funding to expand home visiting to more families and also increase support for televisits with current clients, many of whom have become less accessible to home visitors.⁶ Additionally, state policymakers should also support home visitors, who are also facing increased challenges related to COVID-19 and need additional mental health support as they serve families.⁷

Endnotes can be found in the publication PDF here.

Support for this Fact Sheet was provided by First 5 California.