California Governor Gavin Newsom is proposing a major policy shift aimed at reducing the state’s ballooning Medi-Cal costs by reinstating a $2,000 asset limit for eligibility among seniors and individuals with disabilities.
Under the plan, individuals would be disqualified from Medi-Cal if their countable assets—such as savings, property (excluding primary residence), or additional vehicles—exceed $2,000. For married couples, the threshold would be $3,000. If approved, the measure would take effect on January 1, 2026.
State officials estimate the policy could save California nearly $100 million in its first year, with long-term savings projected to approach $800 million by 2029.
The proposal comes as California faces a projected $12 billion deficit and surging enrollment in Medi-Cal, which now serves about one-third of the state’s residents. Newsom’s broader plan also includes halting new Medi-Cal enrollments for undocumented adults starting in 2026. Those already enrolled would be required to pay a $100 monthly premium beginning in 2027, potentially saving the state an additional $5.4 billion over four years.
Critics argue the asset test could harm the most vulnerable, forcing people to spend down their savings just to maintain healthcare coverage. Advocacy groups warn that the change could deepen health inequities for low-income seniors and disabled residents.
Newsom has defended the plan as a necessary step to stabilize the program and balance the budget, saying tough decisions are required to preserve core services for the long term.