What California Families Need to Know About Medi-Cal, Medicare, and Private Options
The cost of nursing homes, assisted living, and in-home care keeps rising. For many California families, this creates real financial pressure, especially for people in their 40s through 60s who are supporting aging parents while still helping their own kids. Planning ahead can make a real difference in protecting your savings, your options, and your peace of mind.
Some families will rely on Medi-Cal as a safety net. Others will use private strategies for more flexibility and control. Either way, understanding your options now - before a health crisis hits - is the key to making good decisions.
What “Long-Term Care” Actually Means
Long-term care is ongoing help with daily activities like bathing, dressing, eating, and getting around—or supervision for someone with memory issues. It can happen at home, in assisted living, memory care, or a nursing facility.
This is different from short-term rehab after a hospital stay. Medicare covers limited skilled care after hospitalization, but it does not cover the ongoing custodial care most people eventually need when they can no longer live independently. That’s why long-term care often becomes one of the largest—and least predictable—expenses in retirement.
How Medi-Cal Helps (and Its Limits)
In California, Medi-Cal can help cover long-term care costs if you meet specific financial and medical requirements. But recent policy changes brought back asset limits, so the rules matter more than ever.
2026 Eligibility Numbers:
Asset limits: $130,000 for individuals, $195,000 for married couples (with adjustments for additional household members).
Look-back period: 30 months. If you transferred assets (like gifts to family) during this window, Medi-Cal may delay your benefits.
Spousal protections: A spouse who stays at home can keep approximately $162,660 through the Community Spouse Resource Allowance.
Estate recovery: After you pass away, California can file a claim against your estate to recover Medi-Cal costs. Proper planning can help protect assets from this.
Example: Say you gifted $60,000 to a family member within 30 months of applying for Medi-Cal. With California’s current average private pay rate around $14,000/month, Medi-Cal would calculate a penalty period of about 4 months ($60,000 ÷ $14,000) before benefits kick in.
The Tradeoffs of Relying on Medi-Cal Alone
Medi-Cal is an important safety net, but it’s not always the best fit. You may have limited choice of facilities or rooms. A sudden health event before you’ve planned could restrict your options. Estate recovery and income rules can reduce what you pass on to heirs. And the application process can be complex during an already stressful time.
If you exceed Medi-Cal’s income limits, want more control over your care, or are focused on protecting assets for a spouse or kids, private strategies may work better.
Private Long-Term Care Strategies
A solid long-term care plan might include one or more of these approaches:
Long-term care insurance: Traditional policies, hybrid life insurance solutions, or California Partnership policies that offer coordinated asset protection.
Self-funding: Setting aside a dedicated portion of your portfolio for future care, invested conservatively for liquidity when needed.
Trust and estate planning: Irrevocable trusts, Medi-Cal Asset Protection Trusts, and structured gifting—when done well in advance—can help preserve assets.
Spousal planning tools: Certain annuity structures can convert countable assets into income for a healthy spouse while coordinating with benefit rules.
Real estate planning: Your home often represents a big piece of your net worth. Planning may involve trust ownership or other strategies to balance housing stability with legacy goals.
Making It Part of Your Bigger Picture
Long-term care planning doesn’t exist in a vacuum. It connects to your retirement income, tax strategy, investment risk management, estate planning, and family communication. A coordinated approach helps make sure care funding decisions support—rather than undermine—your broader goals.
Why Plan Now?
When long-term care planning gets postponed, families often have to make complex financial and legal decisions during a health crisis. By addressing it now, you can evaluate options thoughtfully, keep your flexibility, and align choices with your values.
At Aspire Planning Associates, we take a holistic approach to financial planning, helping clients prepare for life transitions including long-term care. Whether you’re exploring Medi-Cal, evaluating insurance, or developing strategies to protect your assets, we can help you build a plan that fits your situation.
To discuss your long-term care planning needs, call (925) 938-2023 to schedule a consultation.
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This article is for informational purposes only and should not be considered personalized financial, tax, or legal advice. Individual circumstances vary, and readers should consult with qualified professionals regarding their specific situation. Eligibility limits and program rules are based on 2026 guidance from the California Department of Health Care Services and are subject to change.
