Medicaid Policy Changes in California: Who, What, When, and Why?
Medicaid Policy Changes in California: Who, What, When, and Why?
Changes to Medicaid, known as Medi-Cal in California, are scheduled from January 1, 2026 through the end of 2028. These changes are because of two different laws: the federal government’s H.R. 1 bill, and the state government’s 2025 budget bills. This resource talks about some of the changes from these two policies that will affect people on Medi-Cal or applying for Medi-Cal.
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Changes to Medicaid, known as Medi-Cal in California, are scheduled from January 1, 2026 through the end of 2028. These changes are because of two different laws: the federal government’s H.R. 1 bill1, and the state government’s 2025 budget bills. This resource talks about some of the changes from these two policies that will affect people on Medi-Cal or applying for Medi-Cal. There are additional changes affecting the Medi-Cal system more broadly that this resource does not address. If you are not currently on Medi-Cal but want to be, you should apply as soon as possible before the changes begin to take place, starting on January 1, 2026.
Most of the changes to Medicaid are not specific to disabled people. However, disabled people are part of many different groups that use Medicaid. So, this resource explains who is affected by each change.
Before explaining the changes that will take place, it is important to know the following terms:
1. ACA Adult Expansion Group
This refers to the group of adults that the federal Affordable Care Act (ACA) expanded Medicaid to in 2014. The California Department of Health Care Services refers to this group as the “Adult Expansion Population.” The Medicaid criteria for this group are as follows: a person must be an adult aged 19-64, not have children, and have income below 138% of the Federal Poverty Level. This group is eligible based on their income alone, and do not go through a disability eligibility process. People with this type of Medi-Cal usually have an aid code of “M1.” You can figure out which aid code you have by contacting your county Medi-Cal worker.
Another term used to describe this group are people with “MAGI Medicaid.” MAGI stands for Modified Adjusted Gross Income. While this ACA adult expansion group is the “expansion group” that is referred to in this publication, we want to clarify that in California “expansion group” is also sometimes used to describe people without “satisfactory immigration status,” as California extended Medi-Cal coverage to all Californians regardless of immigration status in recent years. So, what does Satisfactory Immigration Status mean?
2. Satisfactory Immigration Status
This is a term used by the Department of Health Care Services (DHCS), which is the Department that oversees California’s Medicaid program.
DHCS considers you to have satisfactory immigration status if:2
“You are a U.S. citizen or national, OR
You are a non-citizen who has an immigration status that allows eligibility for federally funded full coverage Medi-Cal.
Examples include:
- Lawful Permanent Residents (Green Card holders) who are exempt from or who have met the 5-year waiting period.
- Refugees and asylees.”
3. Unsatisfactory Immigration Status
This is a new term now used by DHCS, and the definition may change again soon depending on federal guidance. However, as of October 2025, DHCS considers a person to have unsatisfactory immigration status if:
“[Y]ou do not claim or cannot verify one of the recognized immigration statuses that qualify for federally-funded full coverage Medi-Cal.
Examples include:
- You do not have a status or do not have an immigration status recognized by Medi-Cal.
- You have DACA (Deferred Action for Childhood Arrivals).
- You are in the U.S. on a visitor visa, student visa, or temporary work visa (unless under age 21).
- You are a Green Card Holder ([who] is not exempt from or has not met the five-year waiting period requirement.)
- You have applied for a U visa but it hasn’t been granted.
- You were paroled into the U.S. for less than one year.”3
When does it take effect?
January 1, 2026
Who will it affect?
Medi-Cal members and applicants whose eligibility is based on age (65+), disability (physical, mental, or developmental), or long-term care needs. If you receive Medi-Cal based on your income (“ACA Adult Expansion group”), this does not affect you.
What is the change?
There will be an asset limit of $130,000 for a household of one person, with an additional $65,000 for each additional person in your household. One car and one house (your primary residence) do not count toward this limit. If you go above the asset limit, you no longer get Medi-Cal until you spend down under the asset limit.
Why is this change happening?
This policy is part of the state budget, passed by the state legislature and signed by the governor in June 2025.
When does it take effect?
January 1, 2026
Who will it affect?
Newly applying adults with Unsatisfactory Immigration Status (19+) who:
- Are not pregnant;
- Have not been pregnant for a year or more; and
- Are not a current or former foster youth
What is the change?
California will stop enrolling new adults with unsatisfactory immigration status in Full-Scope Medi-Cal and new enrollees with unsatisfactory immigration status will only qualify for Emergency Medi-Cal. People who are already enrolled can stay on Medi-Cal. Children and pregnant people can receive Medi-Cal regardless of immigration status.
Why is this change happening?
This policy is part of the state budget, passed by the state legislature and signed by the governor in June 2025.
When does it take effect?
July 1, 2026
Who will it affect?
Adults aged 19 to 59 who have Unsatisfactory Immigration Status.4
What is the change?
Dental benefits will no longer be available to this group. Emergency dental care will still be available.
Why is this change happening?
This policy is part of the state budget, passed by the state legislature and signed by the governor in June 2025.
When does it take effect?
October 1, 2026
Who will it affect?
Certain legally residing immigrants (Refugees, parolees, asylees, trafficking survivors, and similar groups).
What is the change?
Immigrants with status of Refugees, Parolees, Asylees, Trafficking Survivors, and similar groups will no longer qualify for federally-funded full-scope Medicaid. Groups excluded under this change may still be eligible for state-funded Medi-Cal if Satisfactory Immigration Status can be verified.
Why is this change happening?
This policy is part of the federal government’s H.R. 1 bill, passed in July 2025.
When does it take effect?
January 1, 2027
Who will it affect?
People who receive Medi-Cal via the ACA Adult Expansion group.
What is the change?
Eligibility will be reconsidered every 6 months, rather than once a year. You will have to work with your county office to show that you are still eligible for Medi-Cal.
Why is this change happening?
This policy is part of the federal government’s H.R. 1 bill, passed in July 2025.
When does it take effect?
January 1, 2027
Who will it affect?
Everyone on Medi-Cal, with different impacts for people who are in the ACA Adult Expansion group than on the rest of the Medi-Cal population.
What is the change?
Before this change, Medi-Cal provides 3 months of retroactive coverage. That means that if your Medi-Cal application is approved, Medi-Cal can help pay for medical care you received during the 3 months before your application date. This policy reduces the amount of time for retroactive coverage:
- The ACA Adult Expansion population will be limited to 1 month of retroactive coverage; and,
- Other Medicaid groups, including children, older adults, and people who qualify based on disability will be limited to 2 months of retroactive coverage.
Why is this change happening?
This policy is part of the federal government’s H.R. 1 bill, passed in July 2025.
When does it take effect?
January 1, 2027
Who will it affect?
This change affects adults in the ACA Adult Expansion. Certain groups will be exempt, but you may need to prove that you are exempt. Exemptions include:
- parents of children age 13 and under
- caregivers of people with disabilities of any age
- medically frail people
- veterans with disabilities.
What is the change?
People in this group will have to report at least 80 hours a month of work, volunteering, or school to maintain eligibility for Medicaid. Verification is required at application and at each redetermination (every 6 months).
Why is this change happening?
This policy is part of the federal government’s H.R. 1 bill, passed in July 2025.
When does it take effect?
July 1, 2027
Who will it affect?
Adults aged 19 to 59 who have Unsatisfactory Immigration Status.5
What is the change?
People in this group will have to pay a $30-a-month premium to keep their Medi-Cal benefits. If they miss premium payments for 90 days, they will be reduced to emergency Medi-Cal coverage only.
Why is this change happening?
Why is this change happening? This policy is part of the state budget, passed by the state legislature and signed by the governor in June 2025.
When does it take effect?
January 1, 2028
Who will it affect?
People who receive Medicaid long term services and supports, in a nursing home or in the community, and who own a home.
What is the change?
There will be a home equity limit of $1 million for non-agricultural homes for Medicaid beneficiaries that need long-term care services, including nursing home stays and home- and community-based services. The $1 million limit will not change with inflation. An individual who has more than $1 million in home equity will not be able to receive Medi-Cal funded long term care services.
Why is this change happening?
This policy is part of the federal government’s H.R. 1 bill, passed in July 2025.
When does it take effect?
October 1, 2028
Who will it affect?
Adults in the ACA Adult Expansion population who make over 100% of the Federal Poverty Level (FPL).
What is the change?
Certain Medicaid services will have a co-pay of up to $35. Primary care, mental health, and substance use disorder services will not have a co-pay.
Why is this change happening?
This policy is part of the federal government’s H.R. 1 bill, passed in July 2025.
We hope this information helps you figure out whether the above changes apply to you. DRC does not offer immigration legal services. If you are concerned the above immigration-related changes to Medi-Cal apply to you, it is important to speak with an immigration attorney who also has knowledge of public benefits/Medi-Cal, or who works closely with a public benefits attorney, as advice on these questions will depend on the facts of each case.
Additional resources:
NHeLP “Changes to Medi-Cal and Covered California Under the OBBBA and the CA Budget”
DHCS All County Letter “Medi-Cal Impacts from HR 1”
Medi-Cal Changes and What You Need to Know - Health Consumer Alliance (HCA)
- 1. H.R. 1 is also known as the OBBBA Or the One Big Beautiful Bill Act.
- 2. https://www.dhcs.ca.gov/Budget/Documents/Final-Budget-Act-25-26/Immigration-Categories.pdf
- 3. https://www.dhcs.ca.gov/Budget/Documents/Final-Budget-Act-25-26/Immigration-Categories.pdf
- 4. For more details on your immigration status and Medi-Cal eligibility, go to www.healthconsumer.org/medi-cal-changes-and-what-you-need-to-know
- 5. For more details on your immigration status and Medi-Cal eligibility, go to www.healthconsumer.org/medi-cal-changes-and-what-you-need-to-know