Medicaid suggested I charge my parents rent instead of them giving a lump sum to improve my home for them. What is an acceptable rate?

Others may have suggestions, but I would think this has to be based on the care you give and prices where you live. If Medicaid suggested this, they should have a ballpark figure.

Otherwise, make a detailed list of what you do for them and what living elsewhere would cost and see what that comes to. I'd check with an estate attorney on this as you are dealing with Medicaid and rules are strict. You will want to be on solid ground, legally.
Carol

I agree with Carol. Also, as an alternative, and this may not work in your situation, sometimes parents can purchase an interest in a child's home in exchange for a larg lump sum. The advantage of this is that it quickly reduces the "countable" assets for Medicaid eligibility purposes, and is not a disqualifying gift to the child.

As long as the parents live in the child's house, their interest will be exempt from Medicaid disqualification. Further, depending on your state's laws, it may even be possible to structure the deed so that upon the death of the surviving parent the parents' interest in the house passes to the child, again, avoiding estate recovery for any Medicaid payments the state may have made on behalf of the parents.

Yes, Gabriel, that is very interesting, I will certainly bring this up with our lawyer. One of the things I am trying to do is shelter as much of their assets as possible. It looks like they will need to sell the house they are moving out of and this may be the answer for what to do with some of that money they will get for selling.