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If to remain safe, to get the proper care, medical attention she needs Skilled Nursing then why would you bring her home? Of course she is going to hate it. No one loves being in a facility.
You make the decision to place a loved one in a facility if you can no longer safely manage their care at home.
With her funds would getting the supplies and or equipment that you need to care for her, hiring a caregiver would that allow her to remain home?
To get the real answer to this you should talk to someone at the VA that can answer this and talk to someone that can answer the Medicaid question.
So if that 3700 includes A&A, take that amount off then Mom may qualify for Medicaid.