I agree with your instinct not to bail her out financially. She's a mess financially.
As for nursing home care and health insurance: thanks to Obamacare, since he's on her insurance, her out of pocket cost for his hospital care is capped (I believe it's something like $6800 this year).
Health insurance will usually cover a month or two in a nursing home if it's considered rehabilitative.
IF it looks like he's going to be a long-term vegetable in a nursing home, then she may need to consider divorcing him so he can qualify for Medicaid.
Your sister needs to attend Debtors Anonymous meetings.
Is she renting out her house? If not, she should. If she can't, she should consider selling the house or letting it go into foreclosure.
The husbands house that she lives in now - can she take in a room mate to help pay the mortgage?
Realize of course that she's not likely to take any financial advice from you. You can lead a horse to water but you can't make him drink.
