What options are available for elderly poor entering phase of dementia where delusions are terrifying and she is calling police and scared?

Delusions are common with dementia in the mid to later ages. Delusions are treatable, however. Have her doctor refer her to a psychiatrist for treatment. She already is concerned about "going crazy" so she may be receptive to the idea. Because her care will be paid for by Medicaid, call them and ask their recommendation for facilities. Your state Dept of Aging is also a good resource to involve.

The first thing that needs to happen is getting her legal representative in place. If she chooses to assign a durable PoA, that person needs to understand what that will entail. Your mom needs to know what will happen if she doesn't assign someone...eventually she will become a ward of the county or someone who is interested in being her guardian will need to pursue it through the courts. With my MIL I just downloaded PoA forms for my state from legalzoom.com. You will need to take the PoA, your mom and 2 non-family witnesses to a notary. You will need an original copy for each PoA (yes you can have more than 1) and an original for your mom to keep. IMO the PoA should be younger than her by 20 to 30 years, local, trustworthy, honest and organized and will be a strong advocate for her.

Next, her medical PoA should get her in for an exam. Do a cognitive test and check for UTI. Make sure what is happening to her mentally actually is dementia. There are many things that can cause the symptoms she's having. Don't assume. Get the facts into her records. If at all possible get her in to see a geriatric specialist, or internist.

She should transition into a care community where she will be safe and get the medical oversight she will need, in addition to a better social life. I don't think Medicare or Medicaid pays for AL. Medicaid pays for LTC. It means sharing a room but all other care and attention is the same as other private pay residents.

Here are some resources:
Social services online (she must go through her own county): Dept of Health and Human Services
Her local area's Council on Aging
Benefits.gov
BenefitsCheckUp.org
https://www.medicare.gov/nursinghomecompare/search.html?
Teepa Snow videos on YouTube (to understand dementia for yourself)

Bless you for helping her through this time of anxiety and uncertainty! I wish you all the best for you both.

You can google “Medicaid Alabama.gov” to get enough info to get your search started. There may also be a social service person available to residents of her previous living facility.

If she has designated a POA, that person needs to be involved and take charge, but otherwise, you or some other trustworthy person close to her should assume that responsibility. You will need to find a lawyer with family life/geriatric experience to be sure the POA is done correctly.

You will have the obvious problem of having to deal with Corona virus related issues right now, but you will be able to begin the process of educating yourself.

She is fortunate to have you there for her.