Long-term care planning is one of the most stressful financial challenges a family can face. Whether you’re watching a parent’s health decline or trying to be proactive about your own future, the question of how to pay for care — and how to protect what you’ve spent a lifetime building — can feel overwhelming.

At Elder Care Law California, we believe that good planning starts not with forms or formulas, but with a conversation. Before we look at a single asset or run a single calculation, we want to understand your family’s short and long-term care plan goals. What are you actually trying to accomplish?

For many of our clients, the primary goal is keeping a parent out of a nursing home for as long as possible — whether that means staying at home with in-home support or transitioning to an assisted living community. For others, a parent has already reached the point where they need skilled nursing care, and the family’s focus has shifted to figuring out how to afford that care without losing the family home or depleting everything they’ve saved.

Once we have a clear picture of your goals, our Medi-Cal planning focuses on three interconnected pillars: Eligibility, Share of Cost Reduction, and Asset Protection. Here’s an overview of each.

Pillar One: Eligibility

Before Medi-Cal will pay for long-term care services — whether in a nursing home, assisted living, or at home — an applicant must meet both medical and financial eligibility requirements. On the financial side, everything starts with understanding assets.

Exempt vs. Non-Exempt Assets

Medi-Cal draws a fundamental distinction between exempt assets and non-exempt assets. Exempt assets are not counted toward the eligibility limit. Non-exempt assets are counted, and they are what we need to plan around. Exempt property includes the principal residence (which remains fully excluded even if the applicant is not currently living there, as long as they express an intent to return), one vehicle, and household belongings. Non-exempt assets generally include cash savings, investment accounts, additional real property, and most other financial holdings.

As of January 1, 2026, Medi-Cal reinstated an asset limit for non-MAGI programs — the programs that serve older adults and people with disabilities. That limit is $130,000 for an individual and $195,000 for a couple, plus $65,000 for each additional household member. Families who are asking how much can you have in assets and still qualify for Medi-Cal often don’t realize that with proper planning, the answer may be significantly more than those headline numbers suggest.

The goal of eligibility planning is to get a complete picture of everything the applicant — and their spouse — owns, and then develop a strategy to position those assets in a way that achieves eligibility while preserving as much as possible for the family. Here are the primary planning tools we use:

Pillar Two: Share of Cost Reduction

Qualifying for Medi-Cal isn’t always an all-or-nothing proposition. Many applicants who have income above Medi-Cal’s no-cost threshold can still qualify for coverage — but they will have a share of cost. This is the amount a beneficiary must contribute toward their own care costs each month before Medi-Cal begins paying for covered services.

For families navigating assisted living, share of cost planning takes on particular importance. To participate in the Assisted Living Waiver (ALW) program — Medi-Cal’s program for seniors who need nursing-facility-level care but wish to remain in a community setting — participants must be eligible for full-scope, no share-of-cost Medi-Cal benefits. This means that having a share of cost can actually be a barrier to accessing the ALW, making it critical to explore every available avenue for reducing or eliminating it.

For married couples, there are often significant planning opportunities under Spousal Impoverishment rules. If one spouse is considered “institutionalized” — either by living in a nursing home or by being enrolled in or on a waitlist for a participating Medi-Cal Home and Community Based Services program — the couple may be able to access higher monthly income allowances and reduced share of cost.

There are also specific deductions available to residents of assisted living facilities that can dramatically reduce or eliminate a share of cost. For a deeper dive:

Pillar Three: Asset Protection

Getting a loved one qualified for Medi-Cal is an important achievement — but it’s only part of the picture. Families are often surprised to learn that Medi-Cal can seek reimbursement for the costs it paid after the beneficiary passes away. This is known as the Medi-Cal Estate Recovery Program, and understanding it is essential to protecting your family’s legacy.

Here’s how it works: Repayment is limited to estate assets subject to probate that were owned by the deceased beneficiary at the time of death, and applies to payments made for nursing facility services, home and community-based services, and related hospital and prescription drug services. In other words, Medi-Cal’s recovery claim runs through the probate process — the legal procedure by which a deceased person’s assets are identified, valued, and distributed.

This means that proactive estate planning — structuring assets so they pass to heirs outside of the probate estate — is one of the most powerful tools available for protecting what you’ve worked to build. At Elder Care Law California, asset protection planning looks at the full picture: how title is held on real property, how financial accounts are structured, whether beneficiary designations are in place, and whether trust instruments should be used to ensure a smooth, protected transfer to heirs.

It’s also important to know that DHCS does not have a claim until after the Medi-Cal client’s death — and the death of any surviving spouse. Nothing is owed during the client’s or surviving spouse’s lifetime. This gives families meaningful time and opportunity to plan — and underscores why the combination of Medi-Cal planning and estate planning, done together, produces the best outcomes for families.

This blog post is intended for general informational purposes only and does not constitute legal advice. Laws and program rules change frequently. Please consult a qualified elder law attorney for advice specific to your situation.