California Governor Proposes Asset Test for Medi-Cal Eligibility

In a significant move to address a growing budget shortfall, California Governor Gavin Newsom has put forth a proposal for an “asset test” aimed at determining the eligibility of seniors for the Medi-Cal healthcare program. Under this new proposal, individuals seeking to qualify for Medi-Cal would need to have assets totaling less than $2,000.

Understanding the Budget Proposal

The budget proposal, crafted by the California Department of Finance, outlines a series of financial challenges facing the Medi-Cal program. The report cites “higher overall enrollment, pharmacy costs, and increasing managed care expenses” as central reasons behind the escalating costs. Over the past decade, costs associated with Medi-Cal have surged by a staggering $20.5 billion.

Freezing Enrollment for Undocumented Adults

In addition to the asset test, Governor Newsom’s proposal includes a controversial freeze on new enrollments of adults who are in the country illegally. This measure is part of a broader strategy to cut down on Medi-Cal expenses. The proposal highlights that significant contributors to the rise in costs include the COVID-19 continuous coverage requirement and essential policy changes, such as the elimination of the asset test for older adults.

Details of the Asset Test

The asset test would encompass various forms of individual wealth. Factors included in the evaluation would be salaries, bank account balances, cash on hand, the value of a second vehicle, real estate holdings, and retirement funds. Those whose assets exceed the $2,000 threshold would be deemed ineligible for Medi-Cal.

Projected Cost Increases

The 2025-26 budget proposal has raised alarms, indicating that Medi-Cal costs have escalated sharply and remain on a trajectory that outpaces state revenues. In the prior year alone, the program’s costs reached $37.6 billion, with future projections suggesting an increase of $10 billion for the coming year if cuts are not made.

Impacts on Low-Income Groups

Medi-Cal provides crucial benefits not only for low-income adults but also for many seniors and people living with disabilities who rely on its services, including in-home care. The asset test, if reinstated, could severely restrict access to these vital resources for vulnerable populations in California.

A Return to Previous Policies

Prior to 2024, seniors were required to undergo an asset test to qualify for Medi-Cal benefits. Governor Newsom’s recommitment to this policy signifies a shift in the administration’s approach to managing the program’s budget amidst financial instability.

Projected Savings from the Asset Test

The proposal posits that the reinstatement of the asset test could yield considerable savings, estimating $94 million for the current fiscal year and up to $791 million by the 2028-29 fiscal year.

Criticism from Advocacy Groups

Disability Rights California, a prominent nonprofit organization, has expressed strong opposition to Newsom’s proposal. The organization argues that the proposed asset test would inflict “tremendous harm” on Californians, particularly the disabled and economically disadvantaged.

In a public statement, the group acknowledged the reality of budget constraints but criticized the governor’s methods, asserting, “While we understand the necessity of some cuts, the priorities reflected in this May revision are even more concerning than anticipated.” They highlighted a perceived disregard for the health and human services that support California’s most vulnerable populations.

Consequences of Stricter Eligibility Requirements

Furthermore, Disability Rights California cautioned that the asset test “effectively demands extreme poverty” for those wishing to maintain access to crucial healthcare services. This assertion underscores the potential fallout of such stringent eligibility criteria.

Governor’s Justification

In defense of his proposals, Governor Newsom acknowledged the challenges of implementing such measures, stating to the Los Angeles Times, “None of this is the kind of work you enjoy doing, but you’ve got to do it. We have to be responsible. We have to be accountable. We have to balance the budget.”

Looking Ahead

As California navigates through these budgetary challenges, the implications of the proposed asset test and enrollment freeze will likely continue to stir debate among lawmakers, advocacy groups, and constituents alike. The delicate balance between fiscal responsibility and providing essential services to the most vulnerable citizens remains a pressing issue that the state will need to address moving forward.

Fox News Digital has reached out to Governor Newsom’s office for further comment on these developments.