‘A disaster’: Thousands of Californian retirees face eviction as insurer axes assisted living benefits. Are you safe?

For families who can’t afford to pick up the cost themselves, the consequences could be severe.

“This is going to be a disaster,” Pauline Shatara, deputy director of California Advocates for Nursing Home Reform, told CalMatters. Shatara said some assisted living facilities have already reported residents being dropped off at emergency rooms.

Health Net disputes that patients will simply be left without care. The insurer told CalMatters that it’s working with members and providers on individual transition plans, which could include moving residents to nursing homes, returning them home with supportive services or connecting them with other programs.

But families say they have been left with little information about what comes next.

Matt Johnstone’s 89-year-old father lives in a North Hollywood board-and-care facility and has dementia. Johnstone said the facility costs roughly $6,000 a month, an expense he and his brother cannot afford without the Medi-Cal benefit.

“There is nothing else,” Johnstone told CalMatters.

The cost of long-term care can quickly overwhelm a family

The benefit being eliminated is part of California’s broader CalAIM initiative. The state ⁠Department of Health Care Services (DHCS) says its Community Supports program is intended to help Medi-Cal members remain healthier and avoid more expensive levels of care (2).

One of those supports allows eligible people who would otherwise need nursing-facility care to live in assisted living facilities instead. ⁠The DHCS describes the service as providing assistance with daily activities, medication oversight and access to 24-hour onsite care (3).

The state further ⁠clarified in July that eligible members already living in assisted living facilities can receive ongoing services through the program, with no time limit on those services. But Community Supports are optional for Medi-Cal managed care plans, leaving insurers with discretion over which supports they offer (4).

That can expose families to costs that are difficult to absorb on short notice.

CareScout’s latest ⁠Cost of Care survey puts the 2025 median cost of an assisted living community in California at $7,000 a month, or $84,000 a year. A private room in a nursing home costs considerably more. Nationally, the median reached $10,798 a month in 2025 (5).

And government health coverage doesn’t necessarily fill the gap. The ⁠Administration for Community Living notes that Medicare generally doesn’t cover the non-skilled assistance with activities of daily living that accounts for much of long-term care (6).

For the Californians losing Health Net’s benefit, the immediate question is where they will live and how their care will be paid for in 2027. But their predicament also highlights a financial risk that extends far beyond one insurer or one state: Long-term care can become one of the largest expenses a family faces in retirement.

Planning for those costs before care is needed can give families more options, whether that means exploring insurance designed for long-term care, building a broader retirement plan that accounts for future health expenses or keeping enough accessible savings to handle unexpected bills.

Prepare for long-term care before you need it

The situation facing Health Net members underscores how quickly long-term care can turn into a financial crisis when families don’t have another way to pay for it.

And it’s a cost worth preparing for well before you need care. AARP recommends planning for long-term care in advance, including considering where you would like to receive care, what resources you would use to pay for it and what role family members might play (7).

Long-term care insurance is one option for addressing that risk. Depending on the policy, it can help cover services that traditional health insurance or Medicare may not — potentially reducing the amount that has to come directly from retirement savings or family members.

Long-term care insurance offers coverage for the costs of in-home assistance, nursing homes or assisted living facilities.

Without proper planning, paying for long-term care could deplete your retirement fund. In many cases, the burden of paying for care often falls on family members — potentially straining their finances.

GoldenCare offers different options based on your needs, including hybrid life or annuity with long-term care benefits, short-term care, extended care, home healthcare, assisted living and traditional long-term care insurance.

But preparing for the possibility of expensive care is only one part of protecting your finances in retirement. You also might need a plan for managing the money you’ve spent decades accumulating, including how and when you withdraw it.

Make your retirement withdrawals work together

Once you retire, taxes can make those decisions considerably more complicated, particularly if your savings are spread across traditional retirement accounts, Roth accounts and taxable investments.

Fidelity notes that how and when retirees withdraw from different accounts can affect the taxes they ultimately pay. Its analysis found that strategically drawing from multiple types of accounts can help smooth taxable income over time, and depending on an individual’s circumstances, it can potentially reduce lifetime taxes (8).

That makes it important to look at your retirement accounts as parts of one larger financial picture rather than making withdrawal decisions in isolation.

Starting in 2026, many Americans aged 65 and older can claim an additional $6,000 deduction on top of their standard amount. But there’s a catch: If your yearly income — including money you take out of retirement accounts — goes above $75,000 (or $150,000 for couples), that benefit starts to shrink.

On top of that, if you earn more than $150,000, any extra retirement contributions you make later in your career have to go into an account where you pay taxes now, not later.

That means many higher earners will end up with two different buckets in retirement — one that’s already been taxed and one that hasn’t. And deciding which one to draw from (and when) could make your retirement income strategy more complicated than usual.

A platform like Empower can help reduce the stress of filing taxes by connecting you with a licensed tax professional who can support you from start to finish.

Unlike stand-alone tax software, Empower lets you manage your multiple retirement accounts in one dashboard and lets you file from the same platform.

Even if you’re not an Empower client, you can still file taxes through Empower by creating a free Empower Dashboard to get started.

Keep some of your savings within easy reach

A carefully constructed retirement plan can’t account for every expense that comes your way. A sudden home repair, medical bill or family emergency can require money now rather than years down the road.