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I just put my mother in a nursing home and am trying to get her on Medicaid. The 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?

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