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Since the health authority is recommending discharge to ALF, as opposed to a locked or secure unit, it cannot be the case that your wife needs to be under that kind of intensive supervision.

And that being so, the short answer to your question - can AHS prevent your choosing to live elsewhere - is no. They can't *prevent* you. You are not a prisoner, and neither is your wife. But if they are strongly advising you it would be foolish not to listen to their reasons.

What are their reasons for recommending the ALF?

More to the point, what does your family think of your idea of moving in with them instead? Do you have their full support? Are you sure you do? And do they know what they're doing?
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Reply to Countrymouse

Are you asking if your insurance company can prevent you from leaving the hospital to go to family instead of going to ALF?
Give us more information so responders don’t have to guess at your question.
Would you be able to get insurance coverage for you and your wife in Ontario?
Would you be leaving AMA? Against Medical Advise? Is your Ontario family with you in Alberta now?
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Reply to 97yroldmom

Alberta Health Services
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Reply to shad250

Lucky, could you tell us what is AHS? Do you live in Canada or in the States?
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Reply to freqflyer