She however decided to stay where she was and we continued to pay her bills with the money she gifted us. Now we're trying to get Medicaid but I see we may have to pay it back it but we can't because we have no money since hubby was laid off and got sick. What to do?
https://www.medicaidplanningassistance.org/denied-medicaid/
If she doesn't need Medicaid for the next 5 years, it should be ok. They 'look back' at her finances for 5 years.
We had a family whose relative will being "evicted" from a lovely AL because she had exhausted her private funds to pay them and needed to apply for NJ Medicaid. Medicaid examined the application and found that $17k of her money had gone to renovate the family's kitchen. Even though they claimed they did it for the senior citizen, the state penalized her and we did not accept her in our LTC facility. No the AL did not deposit her on the curb but they found her a Medicaid bed in a facility that was totally decrepit and barely holding on to it's state certification. Get some temporary part-time jobs and figure out how to pay the required funds back when requested. You don't want to have to become a full time caregiver if she needs to stay in your home until she qualifies for Medicaid. Good Luck