No, Medicaid does not pay for cremation or funerals. However, the Social Security program can make a payment for funerals and burials, and Medicaid has qualifying rules which allow you
to put aside your own money for funeral and burial expenses, so maybe the funeral home's site was jumbling up this information. Here's the straight scoop.
Social Security. The Social Security survivors benefits program pays a special one-time lump sum amount (called the "Death Benefit") of $255 to help pay for funeral or burial costs for anyone who had qualified for Social Security benefits. The money is paid to the surviving spouse (if he or she lived in the same home as the deceased person), or to the child of the deceased person if there is no surviving spouse. To find out how to apply for this benefit, go to the Social Security Administration Web site page A Special Lump Sum Death Benefit[ssa.gov].
Medicaid. Although Medicaid itself does not pay for funerals, cremations, or burials, it does have rules that allow you to set aside money for your own funeral and burial without having that money "count" as part of your assets when Medicaid determines your eligibility for medical or long-term care coverage. Medicaid coverage is only available to people with little money and few other assets. In counting up your assets, though, Medicaid does not count the value of a burial plot you own. Also, Medicaid allows you to put money aside, in a separate account, to pay for your funeral and burial expenses. Or, you may have a prepaid funeral plan without the value of the plan being counted regarding Medicaid eligibility.
The amount permitted for this funeral/burial account is around $1,500 but the exact amount, and the rules for keeping it separate from your other funds, varies a bit from state to state. To find out the exact amount and rules in your state, you can go onto your state's Medicaid Web site. Use any Internet search engine and enter "Medicaid" and the name of your state. Or, you can call the Eldercare Locator toll-free at 800-677-1116 and ask for contact information for your state's Medicaid office, then call the main office and ask about the rules and dollar limits in your state.