Medi-Cal Income Limit Confusion

I am having a hard time understanding Medi-Cal and Covered California and how they determine income. Maybe someone here has some insight.

I was laid off in January. I got a $31k severance payment. Went to apply to CovCal for insurance for our family of 4. CovCal asked for estimated 2024 annual gross income. Based on my unemployed status, that would be $31k severance, $11.8k unemployment over 6 months, $4k interest on savings and $11k capital gains on stock. Total $57k, which should have put us into a nice low cost Blue Cross HMO with our existing Doctors. Great!

Nope. Medi-Cal jumped in and grabbed us. After a few months of phone calls and trips to the county office trying to stay on the Blue Cross plan, the bottom line was Medi-Cal only looks at regular monthly income. Severance didn’t count. Unemployment didn’t count. Cap Gains didn’t count. So according to Medi-Cal, our income was around $350 per month. So we were locked into Medi-Cal in 2024. It has been awful administratively, getting to see an MD has been an incredibly difficult process. I will say though, once you finally get to a Doctor, everything is covered in full (for what we have needed anyway).

Now, 2025 is coming up. Still unemployed, and probably will just stay that way into retirement. CovCal says that the Medi-Cal income limit is $43k for a family of 4.

So, if the 2024 experience is an indication, if I take a 401k distribution of $4,000 per month ($48k over the year) – we would be kicked out of Medi-Cal and back into CovCal territory.

BUT, if I take a lump sum of $48k, then Medi-Cal will consider our regular monthly income to be $0 and force us into Medi-Cal again?

Is that really how it works?