Mom is in home. Greedy sister want to rent house and sell after mom dies. I want to sell it for mom's care, is mom's house exempt?

First of all, your mom can qualify for Medicaid even if she continues to own the house, since it would be an exempt asset--at least initially. So, you need to find out if the rule in your state would allow for the house to continue to be exempt for the rest of her life or if it may be forced to be sold if a physician determines can never return there (there's a split on states on this).
Even if the house will always be exempt, the state will file a claim for the Medicaid it paid to the nursing home during your mother's life, following her death. They cannot seek reimbursement out of the children's assets, only from your mother's assets, i.e., the house.
If your sister sells the house, the money is still your mother's, and she will have too much money to qualify for Medicaid (which has a limit of $2,000 for a single person). It will be possible to do some "Medicaid planning" to protect most of that money, which is what I discuss in my book "How to Protect Your Family's Assets from Devastating Nursing Home Costs: Medicaid Secrets."
I don't see how your sister is correct if she is saying your mother will be on Medicaid after two years, if the house is sold, for the above reasons.

Someone should write another book - this one titled "How to Protect Taxpayers from Devastating Nursing Home Costs".
The home is Mom's, the expenses are Mom's. Sell the home, and spend the money on her care. It is dishonest to distribute assets to family, and leave it to taxpayers to pick up the tab for her care.
What do I know about it? I'm spending my savings on quality care for my wife, not looking for loopholes to shelter money for our kids. Thankfully, they are with me on this, 100%.
In this age of entitlement, we need another "Every American deserves..." statement. "Every American deserves the right to pay their own way until every dollar has been spent honestly and responsibly." Let's keep helping those who truly need help.

If the house is in Mom's name, then doesn't it have to be sold or title transferred over before Medicare kicks in? That is what I thought. money! amazing how it tears families apart. Sad, too.

First, stop making judgments about people's motivations -- like you're the one who wants good care for your mother while your sister is greedy. Second, there's nothing wrong with "resorting" to Medicaid -- there's no shame in it. Both of those are emotional assessments that are complicating an already-complicated situation. In fact, there is a lot of good news here: you've found a home that WORKS for your mom AND your mom has a valuable asset. Those are both fantastic. AND both you and your sister are trying to figure out what is the right way to handle these so that your mom will continue to be ok.
Now, neither one of you has enough information to know. IsntEasy is right: get professional help for that goal that you and your sister actually have in common. Good for you both!

Your sister is going to get herself (and the rest of the family) into hot water if she tries to rig this up herself.
Medicaid typically has a 5 year look-back, meaning that any transfer of assets within a five year period from the date of the Medicaid application is included in Mom's available assets to pay for her own care. In other words, if your sister sells the house and distributes the money and Mom runs out of funds to pay for her own care (before 5 years are up), then Medicaid will consider the money from the sale of the house to be Mom's money and they will not start to pay for Mom's care until AFTER that amount paid by Mom. Example: if your sister got $100,000 for the house, then Mom would be liable for $100,000 worth of care before Medicaid would kick in. So, if your sister insists on scheming to get an inheritance, she better set the money aside for when her scheme backfires or she'll have to come up with the cash or care for Mom herself when Medicaid won't pay.
There's more to it than this (Medicaid is pretty complex), but that's the gist of it. Your family should see an a lawyer who specializes in elder law. This stuff isn't for amateurs and you can get yourselves into very sticky situations.

What happens to the rental income from this house if it is rented? If mom is on Medicaid, doesn't her income have to go to the care facility except for a few dollars per month? It might be difficult to pay for taxes, insurance and upkeep if the rental income goes to the home. As Mr Heiser said, Medicaid will try to recover their money after your mom dies, and there may be nothing left anyway. Sounds like a potential mess to me.

I agree with LonleyBoy 100 percent When mom sold her home (it took 4 years) she was allowed to pay for her own funeral out of her assets and some other medicaid approved things and any monies remaining would have to be reported to mediciad...we had to do an indepth reporting of what the home sold for, etc etc. It was simple but overwhelming such that an attorney called medicaid directly obtained the rules/requirements then we completed a comprehensive list. my mom's home sold for way below market value so there wasn't much left after we paid for the funeral and some other things...Yes, there is the 5 year look back period and rightfully so medicaid will want their share--i think the home becomes an asset if mom is not going to return to it. You need to know the laws/requirements for your state before you act or like another stated, you willl be in financial hot water. I think it is ridiculous to take out a personal loan for care for your mom because if your sister doesn't play this right you will never see your money again. You can google POA responsibilities and see that your sister might be trying to trick medicaid. Inquire with an attorney about an irrevokable living trust but when you get one of those anything in the trust can't be used or touched. Do not proceed in any of the above unless and until you absolutely know the ins and outs of medicaid or you will lose.

Alwayslearning, I don't think you are in a position to give this advice as many siblings, family members, etc. do know each other as they've had a lifetime of learning. Also, the OP's sister isn't the brightest star in the sky either, and I'm saying this because I, too, have POA, and have an elder care attorney that I have met with extensively. So this sister is going to burn her own butt if she does this and she will get nothing in the end except, maybe, jail time.

I, too, agree with Lonelyboy, it's awful in this country that there is little to no relief for caregiving needs, as well as caregiver's needs. Do they think people can just quit their jobs and stay home, while twitching their noses for their own food, water, lodgings, healthcare, etc.?

Sorry kiddo, but the Nursing Home gets it all, even the rent. Stay away from your sister's plans, don't sign anything, let her be the one in jail, not you.

First of all there are ways to protect assets that are perfectly legal and have been set up to be taken advantage of. I have witnessed doctors and their wives driving Mercedes, wearing the finest clothes and women wearing huge diamond rings and you ask them for their insurance and they pull out Medicare and Medicaid cards. Their families learned how to protect their assets, it is legal.

Your sister cannot possibly do this on her own no matter what she says it takes an attorney to do it correctly or she could wind up in a world of hurt and you could lose the estate anyway.

Just because she has POA (so do I) it is not ethical in my opinion to make such decisions without the input from other siblings as you all have a stake in this. I hope your Mom had a trust written up years ago and not just a will or if it is a will it is one that was written by an attorney and signed in front of a notary with witnesses. If not, I would be scared.

POA and possibly all of you need to sit down with an attorney who specializes in family law and Medicaid. You all need to hear what is said and how you can make provisions legally. Do no try this without legal assistance. If you all hear the pros and cons you can then either stand behind her or seek to have her removed from her position.

You might want to read and have POA read Attorney Heiser's book as he seems to always have correct and insightful information.