Does anyone have experience dealing with short term memory loss of husband and step children's manipulation?

You say short term memory loss. When you have a diagnosis that says that your husband isn't capable of managing family finances you can seek conservatorship of finances. Are you already his POA? Would he allow you to be and is he capable of understanding what that would mean? If your finances are combined it may be time to keep your own separate so he cannot give away your money as well as his own. If he is gifting he may severely hamper the getting of any medicaid help in future for himself should he require placement, then run out of money.
You cannot, unless someone is incompetent in management of their own finances, take over finances. So I would protect myself until that is clear, and then get conservatorship to protect him. Sorry you are going through this.

Is the daughter who is POA financially manipulating him? Regardless....even if she has done nothing wrong, you need to be comfortable with future decisions that affect your life as well as your husbands.
I would take him to a certified elder attorney (well versed in Medicaid law for your state) ASAP and see what can be done to protect both of your financial futures. I’m sorry you are in this situation. Don’t be passive about your future. What is not so difficult for you to manage now will be increasingly difficult as you both age. Sounds simple but it has a way of creeping up. Whatever needs to be done will never be easier to do than now.

What is your evidence he is being manipulated? If you take this to the court or an attorney you will need to have some proof, not just an opinion. I assume you mean his daughter has financial PoA -- how do you know she can't act on it right now? You say he has short-term memory loss and it's in his medical records. It all depends on the wording in his PoA...durable or springing, how many doctors have to give same diagnosis, etc. I hope this can work out. Your best bet may be to seek an elder law attorney to see how to move forward.

I would certainly separate your finances from his in order to protect yourself. Better safe than sorry. Hope you can meet with an attorney who has expertise in this type of situation. Blessings to you. Liz