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My MIL is selling her home as she is in assisted living now. She will have 6 1/2 years of money—-how long before she should start the application for Medicaid? Thank you!

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Cali's right. Meanwhile careful record keeping is crucial. No gifting of money to anyone; no buying expensive things for anyone; keep all bank records filed for the 5 year lookback so that you can hand them over 5 years of bank statements. Be meticulous, and you are lucky and smart for this chance to "think ahead" so that the ducks will be in as much order as ducks can ever get. Good luck.
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She doesn’t need to start it for another 6 years at least unless her money runs out sooner. She won’t be eligible until she’s down to her last $2,000.
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The app approval process "usually" takes 3 months. If they send a letter requesting more info or clarified info you will have 1 week to submit it, so pay close attention to any mail from them (and as of right now they only communicate by mail). When you apply you will need the most current of everything: bank and investment statements, etc.) And, yes -- keep very careful records up to that point when she is approved.
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One thing MIL might think of doing now with some of the money from the sale of her house is to set up a funeral/burial trust. I believe the amount varies depending on the state's Medicaid regulations. In our state, it can be up to $10,000, but is higher in other states. The trust can be just a freestanding irrevocable trust designated for funeral and burial expenses, or it can be a prepaid plan set up with a particular funeral home. Someone also needs to check on what the Medicaid allowable amount of assets is in your MIL's state. Our state allows a person to qualify for Medicaid LTC with a higher level of assets than the federal max of $2,000, so a person can be eligible with $8,000 total assets (not counting any funeral trust). This would obviously affect the timing of when to apply for Medicaid. There is usually someone at most facilities who can help with the Medicaid applicaiton process.
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Yes, as said, it takes about 3 months. With my Mom, she went into a NH May first. I had started the Application in April. Mom private paid for 2 months bringing her under the 2k spend down. In that time, I cashed in her insurance money and set up a prepaid funeral. I was given a list of things I needed to do within that 3 months. July 1st Medicaid took over. If I hadn't gotten done what was needed in that 90 days, I would have had to reapply. This means if u haven't picked a LTC facility by the end of 3 months you have to start all over.
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