You say she has psychosis, but has she been officially diagnosed with schizophrenia? The term psychosis is kind of vague. Since she is also bi-polar, it can be called schizoaffective disorder, which is a combination of the two occuring at the same time. Some of what she's saying sounds like paranoid schizophrenia. If she hasn't been diagnosed with that to your knowledge, she should be seen by a doctor again to be put on the proper meds. Unfortunately, these disorders are incredibly difficult to treat. It is probably best that along with meds, she also go to therapy. If she doesn't want to help herself, then that's when you or someone else needs to step in. Even if she hates you for having her admitted (if it came to that), at least you know she's safe and getting the help she needs.
I don't blame you for being afraid for the kids, I would be too. I would simply keep a close eye on her. If untreated, it can become progressively worse, so it's best to get help early on. There are people who with meds and therapy, go on to live perfectly normal lives. Once a person is aware of what is going on with them, it is easier for them to control how these thoughts affect them.