Although Medicare and Medicaid programs do not have provisions for funeral and burial expenses, there are other options to consider when preparing for these expenses.
- Setting up a trust. Dual-eligibles who wish to maintain their needs-based coverage may be required to hold their funeral or burial savings in a special trust. Some trusts may operate like a bank account, while others may have more complex rules governing their use. Certain funeral homes may only accept payments from specific types of trust funds.
- Purchasing a policy for burial insurance. Insurance plans that cover the cost of a funeral and burial may charge monthly premiums or require significant down payments and recurring payments throughout the year. The benefits may not count against needs-based eligibility rules.
- Social Security benefits. Upon a Social Security recipient’s death, a surviving spouse or child may receive a one-time lump sum payment that can be used to help offset the costs of the funeral and burial. The exact amount is established by the Social Security Administration.
The Differences Between Medicare and Medicaid
Understanding the differences between these two public healthcare programs and how they can work together can help you make informed decisions about your needs. Original Medicare, Part A and Part B, are available to anyone over the age of 65 and for certain persons under the age of 65 who are disabled and have qualifying health needs. Medicaid is a needs-based program that is only available to applicants who qualify according to certain financial and care requirements.
While both are federally funded programs, private insurers are contracted by the government to provide services within their network of healthcare professionals and facilities. These policies can differ by state and insurer and can change throughout the year, so it’s important for recipients to stay updated on their chosen provider’s rules and their state’s guidelines for qualifying for healthcare assistance.
Those who qualify for both programs, also known as dual-eligibles, usually have any expenses not covered by Medicare paid for through Medicaid’s system. However, neither program covers funeral or burial expenses.
Savings Exemption from Asset Limits
Applicants to Medicaid’s needs-based healthcare program have limits to how much income and assets they can have on-hand in order to qualify. The exact dollar amount can change depending on which state the recipient lives in, plus changes to policy can occur throughout the year that alters eligibility determinations.
Likewise, rules that govern what kind of assets can be exempt from an applicant’s countable resources are established by each state. Savings that are set aside to cover funeral and burial costs typically qualify as an asset exemption, but how these funds are kept separate from other income and resources, as well as how much can be saved for that purpose, can be different from state to state. People who are considered dual-eligibles should contact Medicaid’s state eligibility office to verify how the state determines these limitations.
Options for Funeral Expense Coverage
Eligibility caseworkers and provider representatives in each state can help recipients understand their options and, in the case of needs-based program benefits, any limitations that may disqualify them from receiving those benefits.