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Low-income older Californians soon won’t need to prove their asset levels to be eligible for Medicaid long-term care, after the approval of a state plan amendment.

The Golden State is on the verge of becoming the first to completely eliminate its asset limit for all of its Medicaid programs. The Centers for Medicare & Medicaid Services approved California’s state plan amendment last month, calling it a “first of its kind.” 

Assembly Bill 133 created a two-phased approach to eliminating the asset test for all non-modified adjusted gross income (Non-MAGI) Medi-Cal programs, including Medicare savings program and long-term care.

Phase I was implemented July 1, 2022, and increased the asset limit to $130,000 per individual and $65,000 for each additional family member. The previous limits were $2,000 for an individual, $3,000 for a couple and $150 for each additional family member. 

Phase II will go into effect Jan. 1, 2024, and will eliminate the asset test entirely, allowing individuals to have a financial safety net for emergencies.

The change, according to the California Department of Health Care Services, will allow a larger number of applicants to become eligible for Medi-Cal benefits, and allow qualified beneficiaries to retain a larger amount of non-exempt assets and still be eligible for Medi-Cal.

Broadens beneficiary eligibility

The removal of the asset limit marks a “positive change” for older Californians, according to LeadingAge California Director of Regulatory Affairs Meredith Chillemi.

“Even more older adults will have access to assisted living options that meet their long-term care needs,” Chillemi told McKnight’s Senior Living. “Through this change, a larger group of older adults are eligible to participate in two CalAIM [California Advancing and Innovating Medi-Cal] Community Supports that can be offered in assisted living, including respite and nursing facility transition/diversion settings.”

She added that as new resources emerge, LeadingAge California assisted living providers are exploring bundled fees for care and services with the managed care organizations that administer those programs. 

The asset limit elimination applies to individuals receiving benefits in the community as well as long-term care residents. According to the state, the full elimination of the asset test will make 18,000 Californians newly eligible for Medicaid without having to spend down or prove their assets. 

The change will make eligibility for Medi-Cal programs serving older adults essentially the same as those serving younger populations, whose eligibility is based on monthly income only. 

California is the first state to completely phase out the asset test. According to Justice in Aging, Arizona is the only other state to eliminate its asset test, although it maintains the $2,000 asset limit for individuals needing home- and community-based services or institutional long-term care. Just nine states have increased Medicaid asset limits to more than $3,000, and two states — Connecticut and New Hampshire — have Medicaid asset limits of less than $2,000 for an individual. Some states have increased asset limits specifically for long-term care and/or HCBS. 

The change will have a significant effect on long-term care planning in the state, according to ElderLawAnswers. Even with the elimination of the asset test, income rules remain the same — Medi-Cal recipients may have to use their income to pay a large share of the cost of care.