California Governor Proposes $2,000 Asset Test for Medi-Cal Eligibility Amid Rising Costs

California Governor Proposes $2,000 Asset Test for Medi-Cal Eligibility Amid Rising Costs

In a bold move to tackle escalating Medi-Cal expenditures, California Governor Gavin Newsom has introduced a new asset test for seniors seeking healthcare benefits under the program. The proposed measure requires applicants to demonstrate their financial status by showing they have less than $2,000 in assets to qualify for Medi-Cal.

Understanding the Rationale Behind the Proposal

Governor Newsom pointed to several factors contributing to the surging costs of the Medi-Cal program. He cited an increase in overall enrollment, soaring pharmacy costs, and rising managed care expenses as significant drivers of the budget shortfall. Interestingly, he noted that Medi-Cal costs have ballooned by an astonishing $20.5 billion over the past decade.

Changes to Enrollment Policies

In addition to the asset test, Newsom has suggested freezing new enrollments for adults living in the country illegally. This policy aims to further control Medi-Cal expenses while addressing the fiscal challenges faced by the state.

The governor pointed out that two primary factors have markedly fueled the increased costs of the program. First, the COVID-19 continuous coverage requirement has resulted in more individuals remaining enrolled in Medi-Cal, and second, significant policy changes have been enacted, including the elimination of the asset test for older adults and the expansion of coverage to all income-eligible Californians, regardless of their immigration status.

What Does the Asset Test Entail?

Under the proposed asset test, various forms of assets will be scrutinized. The evaluation will include salary, bank account balances, cash on hand, the value of a second vehicle, the market value of a residence, and retirement savings. Anyone exceeding the $2,000 threshold would be disqualified from receiving Medi-Cal benefits.

The Financial Implications of Medi-Cal

In his budget proposal for 2025-26, Governor Newsom highlighted the stark reality that Medi-Cal costs have outstripped state revenues. The total cost of the program hit $37.6 billion over the past year, with expectations that it could rise by an additional $10 billion in the next 12 months without implementing spending cuts.

Medi-Cal provides essential healthcare services to low-income adults, as well as many seniors and individuals with disabilities. Those who depend on these services often rely on in-home care support, making the program vital for their well-being.

Reinstating a Long-Standing Requirement

For many years before changes implemented in 2024, seniors had to navigate the complexities of an asset test to qualify for Medi-Cal. Governor Newsom’s latest proposal seeks to reinstate this requirement, asserting that it will yield significant budgetary savings. Specifically, he estimates that the asset test could save the state $94 million in the current fiscal year and approximately $791 million by 2028-29.

Reactions from Advocacy Groups

The proposal has garnered criticism from advocacy organizations such as Disability Rights California. The non-profit expressed grave concerns, arguing that this change would inflict “tremendous harm” on vulnerable populations in California.

The organization commented on the challenges posed by budget constraints while emphasizing that such cuts can disproportionately affect those who are disabled, poor, and elderly. Their statement reflects a growing concern about the philosophical direction of state healthcare priorities.

The Broader Healthcare Debate

As the debate surrounding healthcare costs intensifies, reactions to the asset test proposal highlight deep-seated divisions. Critics argue that requiring individuals to prove extreme poverty in order to qualify for critical healthcare services undermines the fundamental purpose of Medi-Cal, which is to provide support to those in need.

A Governor’s Determination to Balance the Budget

In defense of his policies, Governor Newsom acknowledged the difficulty of addressing these budgetary issues. He emphasized the importance of fiscal responsibility and accountability, stating that tough decisions are sometimes necessary to ensure the state’s balance sheet remains viable. In his own words, he remarked that “none of this is the kind of work you enjoy doing, but you’ve got to do it.”

Looking Ahead: Future Budget Considerations

As California faces substantial financial challenges, the implications of Governor Newsom’s proposals will continue to unfold. The combination of reinstating the asset test alongside the enrollment freeze for certain groups underscores the complexity of managing healthcare costs while balancing the needs of the state’s most vulnerable populations.

Fox News Digital has reached out to Governor Newsom’s office for further comments regarding the proposal. Meanwhile, the discussion around Medi-Cal and its sustainability remains a focal point in California’s ongoing budgetary debates, reflecting broader concerns about the state’s approach to healthcare.