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You need to request that he be admitted as a long term care patient.
I'm so sorry that you're having this issue.
In December 2017 my honey had surgery to have a debifulator/pacemaker implanted to replace his defibulator due to arythmia and heart failure. He had difficulties with mobility from the time of the surgery and went downhill. April 1st he swelled up like a balloon (went up to around 260lbs) and had to be pulled out of chairs, off the toilet, and basically lifted out of bed. I am 4'10 3/4 and at the time weight around 190lbs ( I have since lost quite a bit of weight). This tore my back totally up plus I had another TIA during the period of April 1st to May 12th when my honey went into the hospital due to the edema. The doctors started talking about releasing him at home. I told them loud and clear that I could not take care of my honey in the condition he was in due to my own health problems and back issues. I told them that he had to have the mobility that he had had prior to November of 2017. They finally listened. When the date drew near for them to make a discharge determination, they discharged my honey to a rehab facility. Though he was verbally abusive from Feb to the date he was discharged, the issues I dealt with were minor compared to the issues you are facing wenwheal.
Your doctor needs to talk to her doctor and then her doctor needs to talk with Medcaid...advise them of her condition and that you are unable to provide the care that she needs due to her condition and there is no one else to provide that care at home. If they still insist on sending her home then you need to contact an attorney that deals with Geriatric law and Medicaid/Medicare in your state. If you are unable to afford an attorney, check in your area and see if they have legal aid...It is generally a free service or based on a sliding scale.
No matter how much you love them, you have to protect your life and health or you are no good to yourself or anyone else. With my health problems (11 tia's and two major strokes, epilepsy that is dormant, back issues as well as other issues), if my honey had not regained his mobility we would have been looking for other options (non-medical caregivers in the home are expensive) as no matter how much I love him, I could not afford to lose my health and possibly my life. His weight came down to 165 and he has regained almost all of his mobility though it is with a walker... this is the only reason I allowed him to come home. And his temperament has improved. How long before they release her?
Maybe your Doctor can write to Medicaid and explain that you are not physically able to take care of your wife.
What do you mean by "power chair"? Do you mean that your wife sits in an electric recliner that helps her to stand and sit down? Or do you mean a motorized wheelchair?