NEW YORK (MONEY Magazine) - A growing number of families have been relying on Medicaid to help pay for an older loved one's long-term care. Now new federal rules will make it much tougher to qualify.

If you're concerned your parent may one day need coverage, you'll have to start planning sooner and be conscious of these changes:

The look back is longer. You can't own or earn much to qualify for Medicaid - state limits on cash and investments are usually $2,000 or less.

To ensure that affluent seniors don't try to qualify by shifting money out of their name and into, say, their childrens', states look at financial records to root out suspicious asset transfers.

Under the old rules, the lookback period was three years; now it's five years for gifts made after February 2006.

Home equity matters. Before, your house wasn't regarded as an asset. Now home equity over $500,000 counts (states have discretion to bump up the limit to $750,000). So if your parents own a home valued over the limit, they may not be eligible now for coverage, even if the house is their only asset.

Gifting penalties are harsher. If a state identifies a suspicious transfer from your folks' estate, your parents may have to wait to qualify for coverage. The delay is equal to the number of months Mom or Dad could have paid for nursing-home care with the amount gifted.

Under the old rules, the penalty clock started on the date that the money was transferred; now the clock starts on the day your parent applies for Medicaid. The result is a much longer waiting period.

Getting help is more important. To avoid unpleasant shocks, have your parents consult an elder-care attorney or a financial adviser who specializes in planning for seniors. They may never need Medicaid, but preparing now is the best way to avoid a last-minute nursing-care crisis.

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