With a caregiver agreement can my parents pay my sister and her husband a nominal fee with room and board being part of the pay?

Your parents can pay their own way and still be eligible for Medicaid. It doesn't have to be a "nominal" amount for that purpose. For this purpose a written agreement should be in place to be sure Medicaid does not treat the payments as gifts.

I don't know the tax implications of being paid in room-and-board. Your sister will need to pay taxes on her income. More income means more taxes, but also more ability to pay the taxes.

I suggest the family consult an Elder Law attorney for advice on the most advantageous way to set this up.

I am asking if room and board plus a small would be adequate compensation for the achieved goal of keeping tax costs down caregiver and Parents being Medicaid eligible.

nana24bears, I'm not sure what you're asking here. Are you asking if a caregiver agreement would help to prevent problems with Medicaid? Or are you asking if room and board plus a small fee would be adequate compensation?