Mom's nursing home said the state of Illinois wants me to take financial POA. Do I have to do that if she is in sound mind and can sign herself in?

I simply don't know the answer to that. Can you get ahold of medicaid people and ask them?

Whoops, spelled Financial wrong, the home said that Medicaid requires it. They did not tell me this before I got her in. I thought I gave them all the paperwork for the Medicaid application and they they said I need this also???

Only your mother can appoint a financial POA. If she is of sound mind she can appoint you if she wants you to have it. The state cannot force this.