I'm sorry you're having to deal with this. You did the right thing by saying no.
A bit more info. about Medicaid -- it is a joint federal/state plan, and the rules (who qualifies for what when) vary somewhat state-to-state, with the states you'd expect (northeast, west coast, more affluent) having more generous coverage and ditto on low coverage (south, less affluent). But basically, if either your parents needs LTC, it seems likely they'd qualify -- my dad relied on it for years, and basically (a) he had to spend down his assets to ~$2K; (b) he had to apply all his monthly income to his nursing home bill, except for $25, which he got to keep for "incidental expenses;" oh, but (c) he was also allowed to pay his monthly health insurance premiums (Medicare, which is the policy for seniors, and that one's standardized nationwide, plus Medigap, which -- ditto, and helps cover what Medicare doesn't. Of course this -- his being allowed to do so -- was only because that saved the state money relative to having Medicaid cover all those costs, too). Note that (b) didn't go far (obviously), since there was plenty the nursing home bill didn't provide -- haircuts, clothes, phone service, and BTW, a nursing home that accepts Medicaid may or may not have a laundry service, but will lose/mixup residents' clothes...). But, he had a roof over his head, meals, and medical care (+ assisted living).
The complication in your parents' may be that in the case of a married couple, if one requires Medicaid, what the other is allowed to keep is limited -- varies significantly by state. And I know you've said they effectively don't have anything, but depending on whose name the income that comes in, is, a lot of that income might be required to go straight to the nursing home, leaving the other parent with -- not much. Not much you can do about that, but it's something to be aware of as a potential problem down the road, I'm afraid.
