She doesn't "lose her money" but she is expected to spend what she has for her own care. If she has enough to pay her own way in a care center, all is well. If she doesn't use it all what is left can be willed to her heirs.
If she doesn't have enough or if at some point she runs out of money, she can apply for Medicaid. Medicaid will look at what she has done with her money over the last 5 years. If she has been giving it away, that is a problem. If she has spent it on the care center and her own needs, no problem.
Medicaid allows applicants to own one car and one house and still be eligible. But states are expected to be paid back for their expenses through the sale of the house after the recipient dies. It isn't exactly that mom "loses" the house, but that it is considered a way to pay for her own care without actually selling the house while she is alive. If it is sold while she is living, all of the proceeds must be spent on her care.
As BB says, it is kind of complicated. But the basic principle is that people are expected to use all of their assets and income to care for themselves. If that isn't enough, they can apply for Medicaid. Even on Medicaid they must use all of their income on their care.
When Medicaid is involved people have to spend down to 2k (Here in NJ). All assets have to be used for her care. She can private pay and file for Medicaid before money runs out. Once she is in a home, even private pay if Medicaid will eventually be needed, none of her money can be used for upkeep on her home.
If she doesn't have enough or if at some point she runs out of money, she can apply for Medicaid. Medicaid will look at what she has done with her money over the last 5 years. If she has been giving it away, that is a problem. If she has spent it on the care center and her own needs, no problem.
Medicaid allows applicants to own one car and one house and still be eligible. But states are expected to be paid back for their expenses through the sale of the house after the recipient dies. It isn't exactly that mom "loses" the house, but that it is considered a way to pay for her own care without actually selling the house while she is alive. If it is sold while she is living, all of the proceeds must be spent on her care.
As BB says, it is kind of complicated. But the basic principle is that people are expected to use all of their assets and income to care for themselves. If that isn't enough, they can apply for Medicaid. Even on Medicaid they must use all of their income on their care.
Does your mother have the ability to pay for a care facility?
Has she had a "needs assessment" to determine what level of care she needs?
In general, a home is a "non countable asset" if she applies for Medicaid (different from Medicare).
Can you tell us a bit more about the circumstances that prompt this question?