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Carol
If you google "family member rule", you might find this relevant hit re Compensating Caregiving Relatives:
"The law presumes that a person who performs a valuable service for another will be compensated. However, a limited exception to this principle exists when the services are performed between family members. This exception, also known as the family member rule, is a nineteenth century creation that arose from the courts' understanding of the dynamics of the nineteenth century household. However, the household of the nineteenth century has all but disappeared from contemporary society. With the disappearance of this household, the issue that arises is whether the family member rule is still necessary. ..."
You have to pay to get access to the whole document, but it might be worth it just to know what the legal advocates are thinking.
It appears that the momentum for change has been blocked by our wrecked ecomony. Otherwise more states would follow the lead of New Hamphire and Vermont.
Medicaid seems to not get any "government discount" wrt to nursing home payments, so big-picture-wise, this seems like a no-brainer. Except that controlling fraud might be a problem. Maybe the key is to see how New Hamphire, Vermont, etc. think they are doing so far.