What happens if there are no funds to pay nursing home at the 20% Medicare doesn't pay?

If Dad is a wartime vet, call the VA and get funding for Dad. They would also cover Mom in Assisted Living if she needs help. Brother is on his own and will need to find a job or go on welfare.

You can set up a Medicaid Annuity. You need to get legal help and locate an attorney who can help you with the spend-down of assets and then apply for Medicaid. Again, contact an Elder Law attorney who specializes in Medicare/Medicaid. This can be a difficult minefield to navigate. In Massachuetts, an annuity can be set up, and then Medicaid and MassHealth applied for. The social security check will go into the nursing home payment. Most states prevent the "spouse" from losing their home due to one spouse entering a nursing home. Check to see if the mortgage is homesteaded and if the deed shows that mom and brother have "joint tenancy" with survivorship rights. Unfortunately, if the home goes into foreclosure, none of this will matter. The nursing home will have the right to utilize the funds. At that point, when the funds are exhausted, you will have to apply for Medicaid. DO NOT utilize the nursing home's attorney as they are looking out for the nursing home's best interest and not YOURs or your parents. This site is very helpful - nolo/legal-encyclopedia/when-will-medicaid-pay-nursing-home-assisted-living.html

Good luck.