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Does his wife have any cognitive issues? Are any of you her PoA?
I understand that dad needs to conserve funds for his care. What happens when you explain this to her?
I am sorry that you are facing this challenging situation. Consult an elder care attorney.
It is her legal residence but if she isn't on the title or mortgage then she can be evicted (it's usually a 30-day process and costs $ to file the form at the courthouse).
Or, consider calling 911 and telling them she's out of control and you're not sure why and may have an untreated UTI. Do not tell them she has cognitive or mental problem because this isn't considered an emergency and they might not take her to the ER so that you may have an opportunity to get her into the AL.
BUT, if she doesn't have dementia and doesn't have a PoA, she will need to be evicted. If she isn't actually damaging the house, then this is a civil issue and the police can do nothing until a crime is being committed.
Does your Dad have a PoA?
I'm not sure what you expect a 95 yo woman to contribute to the household, but if she were living in AL, you bet the bills would be a ton more!
If necessary, the house can be sold to finance dad's care in MC, but the idea of evicting his wife sounds cruel to me. If the house is sold, offer her a spot in regular AL once again, not Memory Care. The stepmother is always painted to be evil and greedy.....I know. I have 5 stepchildren myself and to hear one of them tell it, I'm the wicked witch of the west! Maybe give her the benefit of the doubt and see what you can do legally, but kindly, to this woman your father loves or loved at one time.