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May revision would reinstate Medi‑Cal asset limits and scale back long‑term supports; seniors and caregivers raise alarm
Summary
DHCS proposes reinstating an asset test (single $2,000 / couple $3,000), eliminating some long‑term care supports and suspending skilled‑nursing incentives; advocates and providers warned the move would push seniors and people with disabilities into worse outcomes and greater cost elsewhere.
The California Assembly Budget Subcommittee No. 1 on Health received testimony May 20 on the administration’s proposal to reinstate Medi‑Cal asset limits for eligibility, roll back some long‑term services and suspend workforce and quality incentive payments to skilled nursing facilities.
Lede and context
DHCS told the committee it proposes returning to the asset limits that were in place prior to recent eliminations: $2,000 for a single household and $3,000 for a couple. The administration estimated roughly $94 million in general‑fund savings in the budget year from reinstating the test. Committee members and advocates warned the change would force households to spend down assets, risk loss of In‑Home Supportive Services (IHSS) benefits, and increase homelessness and institutionalization risk.
Why it matters
The asset limit change targets senior and disability eligibility for Medi‑Cal and IHSS. Lawmakers and dozens of advocates said the policy would reduce access to home‑ and community‑based services that many stakeholders argue are less costly and better for beneficiaries than institutional care.
Proposals and fiscal outline
DHCS described the asset test reinstatement as one of several cost‑containment options. In addition to the asset test restoration, the department proposed: - Repeal of the skilled nursing facility workforce and quality incentive program (WQIP) — established in 2022 — saving about $130 million general fund in the May revision; the administration also proposed suspending a law (SB 1511/2024) that requires alternative power for skilled nursing facilities during outages until funds are appropriated to pay for compliance. - Changes to Program of All‑Inclusive Care for the Elderly (PACE) capitation approach, moving rates toward the midpoint of actuarial ranges to save approximately $13 million general fund in 2025–26 and $30 million ongoing. - A proposal to allow utilization‑management controls for outpatient hospice services; DHCS estimated $25 million general‑fund savings in the budget year and higher ongoing savings.
Questions and stakeholder concerns
Several members recounted constituent stories: caregivers who risk losing IHSS if asset tests count an extra vehicle; parents who fear losing home‑care providers for their disabled children. Committee members and LAO analysts said the administration’s financial estimates had been lower than actual experience when the asset test was previously restored and that eliminating the asset test earlier led to significantly higher enrollment than projected.
The LAO told members that the initial estimate of senior caseload growth tied to asset‑test elimination (around 40,000 newly eligible) proved much lower in practice — the Legislature and LAO now see larger caseload growth — and emphasized the need for implementation planning and analysis of downstream impacts, including homelessness and higher institutional costs.
Providers and advocates testified in person and via organizations including AARP California, United Domestic Workers (AFSCME), the California Association of Public Authorities for IHSS, Alzheimer’s Association, disability and aging coalitions, and county health representatives. They urged rejection of asset‑test reinstatement and budget actions that would cut IHSS or force institutionalization.
Implementation and next steps
DHCS said some implementation detail remains to be worked out and that there might be exemptions or other procedural elements; the department committed to providing additional modeling and to work with the legislature. The LAO recommended exploring less blunt alternatives that target resources more narrowly and urged lawmakers to consider federal rules and the long‑term costs of shifting people out of home‑based care.
Ending
Committee members signaled broad concern and requested the administration provide more granular analysis of the asset‑test changes, the projected numbers subject to disenrollment, and the consequences for IHSS providers and recipients before the legislature commits to adopting the change.
