The Los Angeles Times reported that the California state government is moving to reinstate the “asset test” for Medi-Cal, the healthcare program for low-income individuals and people with disabilities. According to the newspaper, Governor Gavin Newsom’s recent budget revision proposal is a desperate measure to balance the state budget, raising concerns that millions of residents could lose access to welfare benefits.

The asset test restricts eligibility for Medi-Cal and home care programs if an individual’s total assets exceed $2,000, or $3,000 for couples. Assets include cash, bank deposits, and second vehicles. In 2024, the asset test was eliminated, allowing all income-eligible applicants to receive benefits regardless of asset size. However, Newsom claims reinstating the test could save up to $791 million annually, the LA Times reported.
Governor Newsom stated, “No one makes these decisions with joy. But we must take responsibility,” emphasizing that “tough choices” are necessary to address the budget deficit. According to a state report, Medi-Cal program costs have more than doubled, rising from $17.1 billion in the 2014-15 fiscal year to $37.6 billion in 2024-25, driven by a surge in enrollment, rising drug costs, and administrative expenses.

Medi-Cal enrollment grew from 12.7 million in 2019-20 to 15 million in 2024-25. The program provides free or low-cost health insurance to low-income adults, families, seniors, and people with disabilities. Home care services also support the elderly, blind, and severely disabled to receive care at home instead of in facilities.
However, if the asset test is reinstated, many low-income seniors and people with disabilities risk losing benefits. California health advocacy groups warn that “this policy will drive seniors and the disabled into extreme poverty,” noting, “They may deplete their assets to regain Medi-Cal eligibility, but their health could deteriorate in the meantime, leading to higher costs.”

Disability Rights California (DRC) criticized, “A $2,000 limit is woefully inadequate to cover modern living and medical expenses,” accusing the state of “sacrificing the lives of the most vulnerable.” Kim Selfon, an attorney with Bet Tzedek, a legal aid group in LA, said, “$2,000 isn’t a safety net; it’s a poverty trap.”
The elderly and disabled among Medi-Cal recipients will be hit hardest. Reports show they make up just 10% of enrollees but account for an average annual cost of $15,000 per person, nearly double the $8,000 average for other groups.

The reinstatement of the asset test, which could upend the lives of welfare recipients, is a major blow to activists who have fought for years to abolish Medi-Cal restrictions. Cindee Soto, who has a severe disability, recently inherited about $8,000, which has been a lifeline for daily needs. If the policy passes, she risks losing Medi-Cal eligibility. “I’m really scared,” Soto said. “I need care for life, and now I worry that right will be taken away.”
California’s Medi-Cal enrollees still consist of three-quarters families and adults aged 19-64 (Obamacare recipients), with seniors making up a smaller share. However, a significant portion of the Medi-Cal budget is concentrated on elderly and disabled enrollees, fueling ongoing budget pressures.

The policy is slated to take effect on January 1, 2026. Health advocacy groups are urging the state legislature to reconsider, the newspaper reported.

By Se-hee Noh