California’s long-term care laws have shifted substantially over the past three years, and the biggest change for 2026 is the return of a Medi-Cal asset limit after a brief period when assets didn’t count at all. Starting January 1, 2026, applicants who are older adults or people with disabilities will again be screened on assets, this time at $130,000 for an individual rather than the old $2,000 ceiling. That is one piece of a broader overhaul covering wages for nursing home staff, how long-term care benefits are delivered, what facilities must disclose about their finances, and how abuse incidents get reported.
The Medi-Cal Asset Limit Is Back in 2026
Medi-Cal is the primary payer for long-term care in California once residents can’t cover the cost themselves, and its eligibility rules have swung hard in a short period. Assembly Bill 133 first raised the asset limit from $2,000 to $130,000 in 2022, then eliminated asset testing entirely for most Medi-Cal programs on January 1, 2024.1California Legislative Information. California Senate Bill 1354 – Long-Term Health Care Facilities: Payment Source and Resident Census During that window, older adults could qualify based on income alone, without draining savings or selling a second vehicle.
That window has closed. Budget trailer bill AB 116, passed in June 2025, reinstates a $130,000 asset limit for individuals (plus $65,000 for each additional household member) effective January 1, 2026.2Department of Health Care Services. Medi-Cal Changes 2026-2028 Anyone applying for or renewing Medi-Cal in 2026 will have assets reviewed. The threshold is far higher than the pre-2022 rule, but a family with meaningful savings can still be disqualified, and the timing of any spend-down or restructuring matters.
The 30-Month Look-Back Still Applies
A common misconception is that California scrapped the look-back period along with the asset limit. It didn’t. When you apply for Medi-Cal long-term care, the state can review whether you transferred assets for less than fair market value during the prior 30 months. Gifts made to get below the limit can trigger a penalty period during which Medi-Cal won’t pay for your care. California’s 30-month window is shorter than the 60-month look-back used in most states, but with the $130,000 ceiling back in force for 2026, the rule has real teeth again for anyone thinking about moving money to family before applying.
What Medicare Still Won’t Cover
None of these Medi-Cal changes affect Medicare, and Medicare’s role in long-term care remains narrow. Part A will pay for a skilled nursing facility stay only after a qualifying inpatient hospital stay of at least three consecutive days, and only when you need skilled care such as physical therapy or wound management related to that hospitalization.3Medicare.gov. Skilled Nursing Facility Care Coverage is capped at 100 days per benefit period, with a daily copay starting on day 21.
Medicare does not cover custodial care at all. If you need help with bathing, dressing, or eating but don’t require skilled medical treatment, Medicare pays nothing. That gap is why Medi-Cal, private long-term care insurance, and out-of-pocket spending do most of the work in this system.
Long-Term Care Is Now Delivered Through Managed Care
The biggest structural change to how long-term care reaches residents comes through California Advancing and Innovating Medi-Cal, known as CalAIM. Institutional long-term care benefits moved out of fee-for-service billing and into Medi-Cal managed care plans statewide. Skilled nursing facility benefits shifted into managed care on January 1, 2023, and intermediate care facility benefits followed on January 1, 2024.4Department of Health Care Services. CalAIM Long-Term Care Carve-In Member Information
For residents and families, this means long-term care, physical health, and behavioral health services now run through a single managed care entity. Arranging a nursing facility placement generally goes through the plan, which adds a layer of coordination but also opens the door to home-based alternatives. CalAIM created two benefit categories aimed at keeping people out of institutions when possible: Enhanced Care Management, which provides intensive one-on-one care coordination for people with complex needs, and Community Supports, which pay for non-medical services such as help with housing transitions, medically tailored meals, and personal care.5CalAIM DHCS. Community Supports If you qualify for Medi-Cal long-term care, these are worth asking your plan about before accepting a facility placement.
Higher Wages for Nursing Home and Health Care Workers
Senate Bill 525 created a separate minimum wage schedule for health care workers, aimed at bringing the industry floor to $25 per hour.6LegiScan. California Senate Bill 525 – Minimum Wages: Health Care Workers After amendments through SB 828 and SB 159 tied the start date to a hospital quality assurance fee trigger, the first wage increases took effect on October 16, 2024.7Department of Industrial Relations. Health Care Worker Minimum Wage Frequently Asked Questions
The phase-in depends on the employer:
- Large health systems with 10,000 or more full-time equivalent employees reach the $25 floor by June 2026.
- Most other covered health care employers and certain clinics follow an intermediate schedule stepping up through 2028.
- Rural facilities, small county hospitals, and high-Medi-Cal-payor facilities have until June 2033.
The schedule covers certified nursing assistants, home care aides, and other support staff in covered settings. For residents, the practical consequence is higher labor costs across the facilities providing their care, with effects on retention and private-pay rates that will take years to settle.
Staffing and Dementia Training You Can Ask About
California requires skilled nursing facilities to provide at least 3.5 hours of direct care per resident per day, of which a minimum of 2.4 hours must come from certified nursing assistants.8Cornell Law Institute. Cal. Code Regs. Tit. 22, Section 72329.2 – Nursing Service – Staff The numbers are set by Health and Safety Code Section 1276.65 and the corresponding regulation at 22 CCR Section 72329.2, and facilities below those thresholds face enforcement. Asking a facility for its average staffing hours per patient day is one of the most concrete quality questions available.
Because a large share of long-term care residents have some form of cognitive impairment, California also mandates dementia-specific training. In skilled nursing facilities, every certified nursing assistant must complete at least two hours of dementia training within the first 40 hours of employment, plus a minimum of five hours of dementia-focused in-service training each year.9California Legislative Information. California Code Health and Safety Code HSC 1263
Residential care facilities for the elderly face more extensive requirements under Health and Safety Code Section 1569.625. Direct care staff must complete 12 hours of dementia care training, with at least six hours during initial orientation before working independently with residents and the remaining six within the first four weeks. Annual continuing education must include eight hours of dementia-specific training.10California Legislative Information. California Health and Safety Code 1569.625 These are floors. Families choosing a memory care setting should ask what the training actually covers and whether staff are current.
Nursing Facility Transparency and Consumer Protections
Who Owns the Facility and Where the Money Goes
Senate Bill 650 requires the corporate entities behind skilled nursing facilities to open their books. For fiscal years ending December 31, 2023 and later, any organization operating a skilled nursing facility must file an annual consolidated financial report that includes financial data from all related entities in which the organization holds an ownership or control interest of five percent or more and that provide services or supplies to the facility.11California Legislative Information. California Senate Bill 650 – Skilled Nursing Facilities The law also requires a visual diagram of the corporate ownership structure, giving families and regulators a way to trace where Medi-Cal dollars flow in chain-owned or private-equity-backed facilities.
Census, Staffing Disclosure, and Anti-Discrimination
Senate Bill 1354 adds two more layers of accountability for skilled nursing facilities that take Medi-Cal. They must make their current daily resident census and nurse staffing data publicly available, either on their website or by providing it to anyone who asks by phone or email.12California Legislative Information. Senate Bill 1354 – Long-Term Health Care Facilities: Payment Source and Resident Census The law also reinforces the prohibition on discriminating based on payment source. A facility cannot treat Medi-Cal residents differently from private-pay residents in admissions, room assignments, or meals, and it cannot evict or transfer a resident who switches from private pay to Medi-Cal.13LegiScan. Bill Text: CA SB1354 – 2023-2024 Regular Session – Amended
Resident-on-Resident Abuse Reporting
Assembly Bill 1417, effective January 1, 2024, clarified reporting rules when both the person harmed and the person who caused the harm are residents and the latter has a dementia diagnosis. When these incidents don’t involve serious bodily injury, the facility must submit a written report within 24 hours to both the long-term care ombudsman and local law enforcement.14California Legislative Information. California Bill – AB-1417 Elder and Dependent Adult Abuse: Mandated Reporting Failure to comply with mandated reporting for elder abuse is a misdemeanor punishable by up to six months in county jail and a $1,000 fine. If the failure results in death or great bodily injury, the penalties increase to up to one year in jail and a $5,000 fine.
A Public Long-Term Care Insurance Program Under Study
California is studying whether to create a statewide public long-term care insurance program. Assembly Bill 567 established the Long Term Care Insurance Task Force within the Department of Insurance to explore the feasibility of a mandatory program providing a benefit separate from Medi-Cal.15California Department of Insurance. Long Term Care Insurance Task Force
The task force released its actuarial report in December 2023 outlining five possible program designs funded through a payroll tax. Proposed tax rates run from 0.60% of pay for a basic supportive-benefit plan to 3.00% for a comprehensive higher-range plan, with benefit payouts from $36,000 over two years at the low end to $144,000 over two years at the high end.16California Department of Insurance. California Assembly Bill 567 Oliver Wyman Actuarial Report A private room in a California skilled nursing facility can easily exceed $100,000 per year, so even the most generous proposed benefit would cover roughly one to two years of institutional care. No program has been enacted yet, but the groundwork is in place for legislation that could eventually affect every California worker’s paycheck.
Tax Treatment of Long-Term Care Insurance Premiums
If you buy a tax-qualified long-term care insurance policy, part of the premium may be deductible as a medical expense on your federal return. The deductible amount depends on your age as of December 31 of the tax year. For 2026, the limits are:
- Age 40 or younger: up to $500
- Age 41 to 50: up to $930
- Age 51 to 60: up to $1,860
- Age 61 to 70: up to $4,960
- Age 71 and older: up to $6,200
These amounts count toward the 7.5% of adjusted gross income threshold that applies to all medical expense deductions. Only the portion of total medical costs above that threshold is deductible, so the benefit is most meaningful for people with substantial medical spending or high premiums in the older brackets.
On the benefits side, if your policy pays out on a per-diem basis rather than reimbursing actual expenses, the payments are excluded from gross income up to $430 per day in 2026. Amounts above that daily cap or above your actual long-term care costs are taxable.17Internal Revenue Service. Eligible Long-Term Care Premium Limits