Centene’s Health Net will discontinue its Assisted Living Facility Transition Community Support for Medi-Cal members on January 1, 2027, ending an optional service that helps eligible members move from a home or nursing facility into assisted living. Health Net said its own experience and data showed the service had not produced better care or demonstrated the cost-effectiveness the state program was intended to achieve.
The decision comes as California’s statewide Medi-Cal data shows the opposite trend in overall use of the service. The Department of Health Care Services (DHCS) reported that Assisted Living Facility Transitions recorded its largest quarterly increase to date, rising 74% in Q3 2025. Over the same annual reporting period, the number of unique members using the service increased from about 1,000 in Q4 2024 to more than 4,000 in Q3 2025, a roughly 300% increase.
Health Net said it was an early adopter of Medi-Cal’s optional Community Supports but concluded that its Assisted Living Facility Transition service had not led to better care or met the state’s goal of providing a cost-effective alternative. The insurer said its analysis compared members who used the service with a similar control group and found no improvement when measured by emergency department visits and hospital days.
The insurer has not disclosed how many members will lose access to the benefit. CalMatters reported that approximately 3,500 Medi-Cal patients use Health Net to cover assisted-living costs. Health Net said it is working with affected members, care-management teams, providers and the state to develop individual transition plans and identify other programs for which members may qualify. Members who already have an authorization can continue receiving the service through the end of their current authorization period.
What the Assisted Living Transition Service Does
The Assisted Living Facility Transition Community Support is part of California’s CalAIM transformation of Medi-Cal. Community Supports are optional services offered through Medi-Cal managed-care plans to address health-related needs that can affect whether members require more intensive care.
For assisted living transitions, the goal is to help eligible people move from institutional settings such as nursing facilities into community-based assisted living, while also helping some members avoid unnecessary institutional placement in the first place. The service can involve assessing a member’s needs, coordinating care and identifying an appropriate community setting.
This is different from a general assisted-living moving service. Its purpose within Medi-Cal is tied to care transitions, diversion from institutional care and continuity of support.
Statewide Use Has Increased Sharply
DHCS’s latest data provides a broader view of the program than Health Net’s individual experience.
More than 528,000 Medi-Cal members had accessed at least one Community Supports service since the program launched, with more than 1.5 million services delivered. In Q3 2025 alone, nearly 191,000 members used at least one Community Support, up 40% from Q3 2024.
Access has also expanded across the state. DHCS reported that 94% of Medi-Cal members had access to at least 10 Community Supports, while 78% had access to all 15. Assisted Living Facility Transitions was among the services showing the strongest growth during the period.
DHCS’s annual report says the service, formerly known as Nursing Facility Transition/Diversion, grew from approximately 1,000 unique members in Q4 2024 to more than 4,000 by Q3 2025. That represented the largest quarterly increase among Community Supports, at 74%, and the highest percentage growth over the year.
DHCS Found a 9.7% Net Cost Reduction
The statewide results also differ from Health Net’s assessment of its own program.
A June 2026 DHCS cost-effectiveness analysis found that Assisted Living Facility Transitions was associated with a 9.7% net cost reduction. DHCS’s analysis examined Community Supports authorized as In Lieu of Services and evaluated changes in healthcare costs and utilization, including categories such as emergency department visits, inpatient hospital stays and nursing-facility use.
Across the 12 Community Supports included in the analysis, 10 were already demonstrating cost-effectiveness in applicable Medicaid State Plan service categories. Other services showing net cost reductions included Environmental Accessibility Adaptations at 51.4%, Respite Services at 19.9%, Housing Deposits at 15.2%, Medically Tailored Meals/Medically Supportive Food at 10.5%, and Community or Home Transition Services at 9.1%.
The statewide findings do not necessarily contradict Health Net’s conclusion. Health Net said its assessment was based on its own members and a comparison with similar members who did not use the service, while DHCS evaluated the broader Medi-Cal program using statewide data. The two analyses therefore measure different populations and circumstances.
The Change Affects One Service, Not the Entire Program
Health Net’s decision should also be distinguished from a broader reduction in California’s Community Supports program.
DHCS describes Community Supports as an established part of Medi-Cal managed care rather than a temporary pilot. The services address needs including housing instability, nutrition, transitions from institutional care and chronic-condition management. DHCS said it will continue overseeing the program, expanding provider networks and supporting its long-term implementation.
Health Net’s Medi-Cal operations also extend beyond this particular benefit. The company works with Medi-Cal members through Health Net and related plans, including CalViva Health and Community Health Plan of Imperial Valley.
The issue for members is therefore not the disappearance of Community Supports altogether, but what alternatives will be available to people who currently depend on Health Net’s Assisted Living Facility Transition service.
Aging Population Adds Pressure to Community-Based Care
The change comes as California and the wider U.S. healthcare system face growing demand for services that allow older adults to receive care outside hospitals and nursing facilities.
The American Hospital Association reported in August that the number of Americans aged 65 and older is projected to reach 94 million by 2060, nearly one-quarter of the U.S. population. Hospitals and health systems are increasingly developing age-friendly care models, including programs designed to help older adults remain in their homes and avoid unnecessary hospital care.
That broader demographic trend does not determine whether Health Net’s specific service is effective, but it highlights why transitions between institutional and community-based care remain an important issue for Medicaid programs.
What Happens Next for Health Net Members
Health Net said it is working with members and care teams before the January 1 termination date. Members with existing authorizations can continue receiving the service through their current authorization period, while care-management teams will work on individualized transition plans and assess eligibility for other programs.
The key question will be whether those alternatives can provide a comparable path for members who need assisted living rather than nursing-facility care.
For Health Net, the decision is based on its assessment that the service did not deliver better outcomes or sufficient cost savings. For California’s Medi-Cal program as a whole, however, the latest DHCS data shows rapidly increasing use of Assisted Living Facility Transitions and a 9.7% net cost reduction in the state’s cost-effectiveness analysis.
Bottom Line
Health Net plans to end its Assisted Living Facility Transition Community Support on January 1, 2027, citing its own data on care outcomes and cost-effectiveness. The move could affect thousands of Medi-Cal members, with CalMatters reporting about 3,500 patients using Health Net to cover assisted-living costs.
At the same time, California’s statewide data shows assisted living facility transitions grew from about 1,000 users in Q4 2024 to more than 4,000 in Q3 2025, while DHCS found a 9.7% net cost reduction associated with the service. The difference between Health Net’s member-level assessment and the state’s broader findings makes the transition worth watching as the insurer prepares affected members for the January 2027 change.
