If Mom has to go into a nursing home, will her retirement money need to be spent down for her to get Medicaid?

Absolutely. Every person who applies for Medical Assistance, must "spend down" all their assets, to the amount specified in their state's MA guidelines. She should buy her burial plans now, that is an allowed expense. But any other expenses within last 5 years will be scrutinized with a fine tooth comb, she cannot have made gifts out of the ordinary, nor extravagant expenses like a gourmet kitchen makeover.

Right. She needs to spend the money that she has saved for her health care, on her health care.

Yes, it will.