Understanding Medi-Cal’s 2026 Asset Limit Changes: What Families with Special Needs Trusts Need to Know

If you’re caring for a loved one with special needs, you understand how crucial it is to protect their access to healthcare and government benefits. With California set to reinstate Medi-Cal asset limits in 2026, many families are asking the same questions: Will this impact our special needs trust? And what steps should we take to safeguard benefits?

Here’s what you need to know, explained in clear and approachable terms.

What’s Changing in 2026?

Beginning January 1, 2026, California will reintroduce asset limits for Medi-Cal’s non-MAGI (Modified Adjusted Gross Income) programs. Applicants and those renewing coverage will need to keep their countable assets below $130,000 for an individual. An additional $65,000 is allowed for each extra household member. For couples, the limit is $195,000.

This marks a significant shift because California had previously removed these asset limits.

What Counts as an Asset?

Assets generally include items of financial value such as cash, savings, investments, and property. However, some resources do not count. Your primary residence, one vehicle, personal belongings, and certain retirement accounts are considered exempt and are not factored into Medi-Cal’s asset calculation.

Where Do Special Needs Trusts Come In?

Here’s the reassuring part. A properly structured special needs trust is specifically designed to protect eligibility for benefits. Funds held in the trust are not counted toward the Medi-Cal asset limit. You can think of the trust as a financial shield that allows your loved one to receive additional support without putting their access to benefits at risk.

Trust funds can be used for services and items that Medi-Cal does not cover. This might include specialized therapy, educational programs, or quality-of-life activities.

However, how the funds are used is important. If the trust pays directly for food or housing, it may reduce your loved one’s Supplemental Security Income (SSI) benefits, even if they remain eligible for Medi-Cal. Think of it as following a set of rules. With careful use, you can help your loved one enjoy the full range of available support.

What Should Families Do?

There’s no need to panic. Special needs trusts are still one of the best tools for long-term protection.

• Be mindful about how the funds are spent. Use the trust for medical expenses, education, personal needs, or recreation. Avoid using it directly for food and rent if preserving full SSI is important.
• Keep detailed records. The trustee must document how every dollar is spent and may need to provide reports to the court or to government agencies.
• Seek professional advice. If you are uncertain, consult someone who specializes in special needs planning. These rules can be complex, and getting help early on can save a lot of stress later.

Bottom Line

Medi-Cal’s 2026 asset limit changes may seem intimidating, but families who have established a special needs trust, or are considering one, are already taking the right steps. With thoughtful planning and the right guidance, your loved one can maintain essential benefits while also enjoying the added support that enhances their quality of life.