Medi-Cal is a state and federal assistance program that provides medical care for low income California residents. While the program does have income requirements, anyone who is considered “medically needy” based on his or her financial resources can qualify. Though the program does make allowances for those with limited resources, it is possible for a person who was previously found to qualify for Medi-Cal to lose eligibility after his or her financial status changes significantly. When this happens, a person must use, or “spend-down” these new assets before receiving assistance again. Understanding spend down rules will help you and those closest to you know what to expect should you find yourself exceeding Medi-Cal allowances.

What are Resources?

Before you and your loved ones can plan for the future, it is important to know what Medi-Cal considers to be a resource. Since 1989, California allows one person to have a certain amount of “exempt” and “non-exempt” resources. Exempt resources that are not considered when determining eligibility are:

  • Household goods and personal items;
  • Jewelry for a single person such as heirlooms, engagement or wedding rings;
  • Any home that is a primary residence including houseboats and mobile homes;
  • One vehicle used for your transportation;
  • Term life insurance;
  • Burial plots and prepaid irrevocable burial plans along with up to $1,500 in burial funds;
  • Work-related pensions and IRAs.

These resources do not count towards the $2,000 property limit each person is allowed to have.

What Resources can Affect Eligibility

Non-exempt resources include real property and income earned from that property, but those are not usually the resources that affect eligibility. Assets that are received as a gift or inheritance are usually the source of problems for those who receive Medi-Cal. Transferring or giving away these assets can also lead to penalties if the recipient is currently living in a nursing home or has moved to a nursing home and applied for Medi-Cal within 30 months of transferring assets. If you or a loved one who is not blind or a disabled child does not live in a nursing home and receives resources that make you ineligible for Medi-Cal, knowing how to spend down resources to protect your long-term eligibility is vital.

Sharing Costs

If you have resources that exceed income limits, then you may be required to pay a share of your health care costs. This cost is similar to the deductible some private insurance companies require. This share is usually the difference between exemptions and your excess income. A person who receives a large cash inheritance or is gifted a lump sum of cash may need to spend the money down and reapply for Medi-Cal.  In some cases, this is avoided by the use of a trust that is exempt.

Contact an Attorney

Anyone who plans to leave an inheritance for a family member or friend receiving Medi-Cal, or a person who has recently received an inheritance, should contact an attorney immediately. A qualified attorney who is familiar with Medi-Cal asset preservation can determine the best way to keep your inheritance without losing your eligibility. The compassionate elder law attorneys at MMZ Law are prepared to help you find the best option for your unique situation. Call us to schedule a consultation at our Claremont, California location so that we can begin assisting you today.




341 W. 1st St. Suite 100
Claremont, CA 91711

MARIVEL M. ZIALCITA is the founder of MMZ LAW, A Professional Corporation, where she practices in the areas of Elder Law – Medi-Cal Planning Asset Protection, Trust & Estate, Special Needs, Conservatorship, Trust Administration, & Probate. Ms. Zialcita is a frequent speaker on trust and estate matters and holds memberships in the State Bar of California, Trust and Estate Section, The San Bernardino County Bar Association, Wealth Counsel and Elder Counsel. She currently assists in the pro bono legal services program at the James L. Brulte Senior Center in Rancho Cucamonga, California. She is based in Claremont but assists clients throughout Southern California.

This information is educational information only and not legal advice.