By admin 
Democrats in the Legislature are pushing back on Gov. Gavin Newsom’s plans to reinstitute a $2,000 assets limit on low-income elderly people receiving healthcare via Medi-Cal, the state’s Medicaid equivalent. The move comes just two years after California became the first to eliminate the wealth test before backtracking earlier this year due to budget pressures.
Read more Healthcare advocates praise Legislature for resisting Gavin Newsom’s budget cuts
California began phasing out asset tests for Medi-Cal in 2022 by raising the net worth recipients could stockpile in their bank accounts or possessions to maintain insurance coverage and in-home care services from $2,000 to $130,000. Between 2024 and 2025, the state removed the test entirely until reinstituting it at the beginning of this year.
In last month’s revised May budget, Newsom proposed slashing the asset limit by 98% to $2,000 for single adults and $3,000 for couples starting next January, which he said could save the state up to $500 million. The limit also applies to the In-Home Supportive Services program that provides in-home carers to Californians with disabilities, including seniors and children, which is tied to Medi-Cal eligibility.
On Thursday, Democrats in the Assembly and Senate announced their fiscal plan, which would maintain the current limits of $130,000 for single adults until July 2027 and opt for a $21,000 threshold thereafter instead of the governor’s proposed $2,000.
In a joint statement, Senate President pro Tem Monique Limon, Assembly Speaker Robert Rivas, Assembly budget committee chair Jesse Gabriel and Senate budget committee chair John Laird called the plan “a responsible, compassionate budget that protects the services people rely on most” while delaying “pending health care reductions that would have significant impacts on seniors, people with disabilities, and low-income Californians.”
Advocates have criticized Newsom’s proposal to reinstate the $2,000 asset limit, citing the state’s affordability crisis and the fact that wealth limits for Medicaid recipients have not been adjusted for inflation since they were originally introduced at the federal level in 1989.
The Department of Health Care Services, which oversees Medi-Cal, counts assets as the contents of recipients’ bank accounts, cash, their second homes and second vehicles, and other financial resources. Primary homes and vehicles, retirement funds and household items like furniture and clothes are not counted.
Health 4 All, a coalition of immigrants’ rights and healthcare advocates, praised the Democrats’ plan with some reservations. In a press release, the coalition said the plan would buy “critical time for millions of Californians who depend on Medi-Cal for their health care,” as the state braces for major budget shortfalls due to the One Big Beautiful Bill.
Read more Mount Vernon in Sacramento area? Newcastle gem channels Founding Father’s home
Carlos Marquez III, the executive director of the County Welfare Directors Association of California, called on Newsom to support the budget plan while applauding legislators for their “resounding rejection of the Administration’s proposed county cost shift and de facto service cuts to In-Home Supportive Services and Adult Protective Services.”
Nishi Nair, a policy analyst at the California Budget and Policy Center, pointed out that many landlords require tenants to pay first and last month’s rent upfront, which would force Medi-Cal recipients to blow past the asset limit in a state where the average rent is $1,500.
For example, if a person has $10,000 in their bank account, it would require them to spend down $8,000 before they renewed their insurance to maintain coverage.
“For the population it applies to, it’s extremely limiting,” Nair said. “In 2026, with the affordability crisis, $2,000 is not what it takes to make ends meet in this state.”
The governor, Assembly and Senate leaders have 12 days from Monday to reach an agreement ahead of the next fiscal year starting July 1.
Nair cited lawmakers’ willingness to reject Newsom’s asset limit proposal, saying their appetite to push back “speaks to how unpopular and punitive this measure is.”
Read more Healthcare advocates praise Legislature for resisting Gavin Newsom’s budget cuts