Gavin Newsom proposes $2,000 asset eligibility test to control soaring state Medi-Cal costs

The governor's budget proposal, written by the California Department of Finance, said the reasons for the increased costs include "higher overall enrollment, pharmacy costs and higher managed care costs."

In the last 10 years, he said, Medi-Cal costs have increased by $20.5 billion. 

The assets included in the test would be salary, money in a bank account, cash on hand, a second car, home value and retirement funds. Applicants with more than $2,000 in assets would be ineligible for Medi-Cal.

The 2025-26 budget proposal said Medi-Cal costs have increased starkly and continue to outpace revenues. The program cost $37.6 billion over the last year, and the cost is expected to increase by $10 billion over the next year without cuts.

Along with low-income adults, many seniors and people with disabilities use Medi-Cal benefits that include in-home care services. 

For decades before 2024, the asset test was required for seniors to prove their eligibility for Medi-Cal, and Newsom's proposal would reinstate it. 

The proposal said that the asset test would save $94 million this fiscal year and $791 million by the 2028-29 fiscal year. 

"While we understand the reality of budget shortfalls and that cuts will sometimes be necessary, the priorities and reality of this May revision are even worse than what we imagined," the group said in a statement. "It demonstrates a continued willingness on the part of the governor to sacrifice the health and human services of California's people, particularly the disabled, poor, and elderly populations of this abundant state."

Fox News Digital has reached out to Newsom's office for comment.