Health Net Is Ending Assisted Living Coverage for 3,500 Medi-Cal Patients, With Provider Contracts Cut Off October 7

A North Hollywood family is among those facing the deadline. CalMatters reports the insurer has not notified members directly, and state regulators say coverage should run through December 31, 2026.

Health Net, one of the largest Medi-Cal insurers in the country, is canceling its assisted living benefit at the end of 2026 for roughly 3,500 Medi-Cal patients, most of them elderly, according to documents obtained by CalMatters and interviews with providers published on August 17, 2026. Medi-Cal is California's public insurance program for low-income residents and people with disabilities. Health Net operates Medi-Cal plans in 10 counties, including Los Angeles County.

One of the affected residents lives in a board-and-care facility in North Hollywood. Matt Johnstone told CalMatters that the facility called to say Health Net was eliminating the benefit and that his 89-year-old father, who has dementia and needs around-the-clock care, would have to move out soon. The facility costs roughly $6,000 per month, which Johnstone said neither he nor his brother can afford. CalMatters is not publishing the father's name because Johnstone fears the plan will target him for speaking to the press.

“He's declining, and I just don't know what's going to happen if the program ends,” Johnstone told CalMatters.

The dates that matter

Health Net notified some major contractors that services would be terminated on October 7, 2026, according to providers interviewed by CalMatters. State regulators told the outlet that Health Net members are entitled to services until December 31, 2026, as long as the care is “clinically appropriate.” Health Net must notify members of a termination 30 days before the service end date, and providers told CalMatters they do not know whether those notices will arrive at the end of September or the beginning of December.

Jonathan Istrin, chairman of Libertana, one of the groups whose contracts were terminated, put the gap plainly to CalMatters: “The question is, what's Health Net going to do after October 7? They don't have contracts with these facilities, so how are they going to provide?” Libertana subcontracts with hundreds of assisted living facilities in California, Istrin said.

The money trail

Assisted living support is an optional Medi-Cal benefit under CalAIM, the state's effort to improve Medi-Cal services and save money by stabilizing high-cost patients who cycle through emergency rooms. Plans opt in and decide annually whether to continue. The benefit pays a majority of 24-hour service costs at board-and-care homes, memory care facilities and larger group settings, while residents pay room and board.

In a termination notice filed with the California Department of Health Care Services, Health Net said its decision was driven partly by members moving into assisted living from their own homes rather than from nursing homes, a pattern that costs the plan money instead of saving it, CalMatters reported. The notice also faults regulators for changing guidelines that had previously let Health Net limit those community transitions. “The guidance raises concerns regarding program integrity and long term viability,” the notice reads.

An assisted living facility costs between $5,000 and $7,000 monthly, while the average nursing home costs upwards of $10,000 per month, according to figures cited by CalMatters.

What the insurer and the state say

In an unsigned statement, a Health Net spokesperson disputed that patients would be left without services or end up unhoused, saying affected members could be moved to nursing homes, back home with in-home supportive services, or to other programs. “We are working closely with members, providers and care management teams to develop individualized transition plans based on each member's clinical needs and eligibility for other available programs and services,” the statement said. The company also said internal data showed the program “has not led to better care” in emergency room visits or hospital days.

The Department of Health Care Services refused an interview request from CalMatters and said by email that it would communicate with Health Net to “ensure member protections and continuity of care,” and that “Medi-Cal members have strong protections.”

Pauline Shatara, deputy director of California Advocates for Nursing Home Reform, told CalMatters that a few assisted living facilities have already confirmed residents were dropped off at emergency rooms. “This is going to be a disaster,” Shatara said. Two other plans that contract with Health Net, CalViva Health and Community Health Plan of Imperial Valley, have notified the state they also intend to discontinue the benefit.