Area of Aging did an assessment and will not give me any financial help because she is not nursing home material. Now what?

I don't know what kind of essentials you're referring to, but you might be able to find some at thrift stores. Or just buy them for her as a gift from you.

If you're not sure if Medicaid would help, contact them. They might even have some suggestions on where you can get help. Or consider substitution - get food from a food pantry and use the money saved on the "essentials."

Will her MD certify her need for ADL's such as bathing, feeding, dressing and controlling medication? Those are the things that trigger aid.

Basic essentials are food, shelter and medical care. Medicaid takes care of that. SNAP provides food stamps. HEAP helps pay for heating.
If you want to be paid for your services, she has to be housebound, unable to feed herself, needs help getting dressed and assistance with toileting and bathing. What are her needs?

Those things she does get,however what about all the other things hearing aid batteries,denture adhesive,denture cleaner,over the counter meds etc.
Don't they think you have to buy them new under garments or clothes in general.
None of these programs even consider these items.
You would think that they would want family to take care of their elderly,but like you said since she is not just sitting in a chair wasting away she is capable of doing for herself....not true spinal stenosis is very painful that is why the doc just increase her pain meds to 4x a day.