Medicare covers medically necessary healthcare – but you do have options to help pay for funerals and other final expenses.
According to the latest data from the National Funeral Directors Association, the average cost of a funeral with a viewing and burial is $7,848. The average cost of a funeral with viewing and cremation is $6,970. With that said, you may wonder what programs offer financial assistance for final expenses.
Let’s look at ways people pay for funerals and answer, “Does Medicare cover funeral expenses?”
How to pay for funeral expenses
Medicare does not pay for funeral costs. However, there’s one plan option that may allow you to use funds that were set aside for medical expenses. More on this later.
Here are some other ways families typically pay for funeral expenses.
If the deceased left behind a spouse, the spouse will typically have access to shared funds. (Make sure you understand the state-specific laws regarding joint ownership of accounts.)
However, if no spouse is left behind, it may take time for the funds to be transferred to beneficiaries. One way to avoid this problem is to set up a joint account with a beneficiary that holds enough money for funeral expenses.
After the policyholder’s death, the life insurance company will disperse a lump sum to the beneficiaries. These funds can be used to cover funeral expenses.
It’s worth noting that it takes time for beneficiaries to receive payouts from insurance companies. However, most funeral homes accept life insurance policies as payment.
Prepaid funeral plans
Many funeral homes and cremation providers offer a prepayment plan or final expense insurance. Ensure you read the details of these policies and understand what happens if you die in another area of the country or outlive the business.
It’s also important to remember that there may be additional businesses your loved ones will need to pay at the time of your death, such as the cemetery, the monument company, and the florist.
Social Security death benefit
Depending on the years a person worked and how much Social Security tax was paid, the deceased’s spouse may qualify for a $225 death benefit.
Contact the Social Security Administration at 1-800-772-1213 to report your spouse’s death. Make sure you have your loved one’s Social Security number on hand when you call.
Other sources that might help pay for funeral expenses
Local or state agencies (including Medicaid) may offer assistance. Here are some additional programs to consider that might offer some aid.
- Deceased’s employer: Check to see if the deceased’s employer offers survivor benefits, which can be used to cover funeral costs.
- U.S. Department of Veterans Affairs: If the deceased was a veteran, they may be able to receive a free burial and headstone in a national cemetery. Check with the Department of Veterans Affairs to learn more.
- U.S. Department of Justice, Office for Victims of Crime: If your loved one died due to a crime, search for victim compensation and assistance programs in your state.
- Fundraising: Some families use crowdfunding to get help paying for funeral services.
As you can see, there’s not much help for families who need assistance paying for their loved one’s funeral expenses.
Does Medicare cover funeral expenses?
Original Medicare does not cover funeral costs. Medicare only pays for portions of medically necessary healthcare costs.
However, if your loved one had a specific type of Medicare Advantage Plan, there may be funds set aside that family members can use to pay for funeral costs.
Some high-deductible Medicare Advantage Plans include a Medicare Medical Savings Account (MSA). The plan deposits money into this specialized savings account to cover medical-related expenses.
Money deposited into the account during the current calendar year must be paid back to the Medicare program if the person passes. However, any funds left in the account before the current year can be distributed to the beneficiary (after the necessary taxes are paid). This money can be used for funeral expenses.
How to save on funeral costs
We know you might be disappointed to learn that the federal Medicare program and SSA do not offer much in terms of funeral assistance. However, here are some ways a surviving spouse, children, or extended family can save money on end-of-life expenses.
Consider direct cremation or burial
Embalming is not legally required. To save money on funeral expenses, consider foregoing a traditional viewing and having the body directly cremated or buried.
You can still have a religious or secular memorial service without the body being present. Some choose to have the cremated remains at the site of the service. Or if burial was preferred, the family may have a short service at the cemetery.
Save on burial costs by purchasing a casket online.
To save money on burial expenses, shop around for caskets. You may be able to save money by purchasing a casket online. The funeral home cannot refuse to use a casket from another retailer. There are many online casket companies, and you can also have one directly shipped to the funeral home from Amazon, Walmart, and Costco.
Have the memorial service at your loved one’s place of worship.
Most of the time, you can cut costs by scheduling memorial services at the deceased’s place of worship. Some religious institutions also have their own cemeteries for their members or parishioners, which may help you save on the cost of the burial plot.