Inside the FEMA program that spent $1 billion on COVID-19 funerals

Kelsie Lozano’s grandfather, 71, and her mother, 49, went into the hospital with COVID-19 on July 7, 2020. Neither of them came home. Their deaths mean her family was among the more than 600,000 people who were “permanently marked” by COVID-19, said Lozano, a resident of Pleasanton, Texas. “This isn’t something that is ever going to go away.”  

It was also a financial hit. In total, the 30-year-old estimates that her family spent about $7,000 on post-death services for her family members, Massiel and Francisco H. Escalante, who were both cremated and later memorialized in socially distanced services at local churches. Lozano applied for reimbursement of costs related to her mother’s cremation—approximately $3,200 in fees—three days after FEMA’s funeral assistance program started taking applications in April 2021. 

She finally received a 100% reimbursement from FEMA this week by direct deposit. “It’s kind of bittersweet,” she told Fortune over the phone as her 8-year-old daughter played beside her. “I would much rather have my mom back.”

Massiel Escalante and Francisco H. Escalante
Kelsie Lozano lost both her mother, Massiel Escalante, left, and her grandfather Francisco H. Escalante, right, last year.
Courtesy of Kelsie Lozano

Lozano is one of more than 150,000 applicants to the massive FEMA program, which all indications suggest will be issuing COVID-19-related funeral aid through 2023. “This is the largest-scale funeral assistance mission that FEMA has ever undertaken,” said Chris Smith, director of FEMA’s Individual Assistance Division, which is housed in the Office of Response and Recovery. Funeral assistance is part of his division’s regular disaster assistance program, he said, “but not to this scale, normally.” 

Speaking on Friday, FEMA officials announced that the program had reached a major milestone: $1 billion in disbursements. “We are committed to providing this assistance with the compassion, fairness, integrity, and respect these families deserve,” FEMA administrator Deanne Criswell said in a press conference. That sum is still less than half of the $2 billion earmarked by Congress in December 2020 to assist with funeral expenses for COVID-19-related deaths that happened on or after January 20, 2020. Further funding for the program was made available through the American Rescue Plan in March 2021. Here’s a look inside the program and why some argue it goes too far—and others contend that it didn’t go far enough.

After the program opened, a deluge of interest—more than 1 million calls on its first day—overwhelmed the call center. Some questions about eligibility for those whose loved ones died before COVID-19 tests were developed had to be ironed out. Overall, Smith said, the program has run fairly smoothly since. Scaling up quickly to process applications and distribute funds “is not new to us,” he said. “We exercise these same kinds of business practices and processes for regular disasters that occur.” 

More than 2,000 call center operatives, including 434 FEMA employees and 1,710 contract staff, are working to shepherd applicants through the process of applying for and receiving assistance. According to Politico, the contractor for this program is General Dynamics Information Technology, which has staffed call centers for FEMA before. The current contract is valued at $202 million and is for two years of work, Politico reported. Most of the staff are working remotely, he said, taking calls from applicants like Lozano to help them figure out what documents they need to gather and navigate the process of applying. 

That process was fairly straightforward for Lozano. “The operator was very friendly and understanding,” she said. After her first call, she contacted the funeral home that performed her mother’s cremation and submitted the receipts they sent her for her mother’s cremation and urn. She was able to check her application’s status online and phoned the help line several more times throughout the months. 

“Every time I called,” she said, “they were real honest that there was just a long line of applications that needed to be processed.” Other than the amount of time it took to be reimbursed, she said her experience was positive. 

A massive operation

When someone like Lozano calls the COVID-19 Funeral Assistance Hotline to apply, call center staff walk them through the process and what documents are needed. Those include personal information for both the applicant and the deceased person, as well as background on any funding the applicant might have received already to pay for the funeral and expenses related to the death. “Once FEMA receives all the required documentation, then we can make an eligibility decision,” Smith said. The help line is available throughout the process.

“The operators were very friendly and understanding,” Lozano said. 

That approachability can come at a mental health cost for those who crew the phones, said Smith. Call center staff “do receive training about how to run the program, but also consistently we are watching our staff to support them in the emotional toll that this takes,” he said.  

Before rolling out the program, Smith said, FEMA worked with people in the death care industry to prepare them for an influx of questions regarding receipts and other documentation related to COVID-19 funerals, burials, and cremations. “We built a coalition ahead of time to really work through these challenges as they arise from individual to individual,” he said. 

“FEMA was really good about reaching out to all of the national associations,” said Barbara Kemmis, executive director of the Cremation Association of North America. 

The costs of funerals

FEMA has provided funeral assistance during a number of local disasters, including 2017’s bumper hurricane season that affected Florida, Texas, and Puerto Rico. The program’s use for COVID-19, a much larger-scale disaster affecting the entire nation, was the brainchild of Rep. Alexandria Ocasio-Cortez and Sen. Chuck Schumer. “This effort began over a year ago when community leaders in [New York’s 14th congressional district] flagged the disparate impact of COVID-19 in working-class areas, compounded with the devastating economic impact of funeral expenses,” Ocasio-Cortez said when the program was first rolled out.

Initial conversations about the amount of money per death that would be made available ranged from $3,000 to $7,000. The pair of lawmakers pushed to have the maximum amount someone can receive increased to $9,000.

“It’s an extraordinary amount of money,” said Joshua Slocum, executive director of the Funeral Consumers Alliance, a consumer advocacy group that has pushed for price transparency in the funeral industry. “Just speaking as a private person and a taxpayer, my jaw dropped open.”

His organization has no official position on where the government should spend its COVID-19 aid money, Slocum said. But “we would suggest to policymakers that they take a broader look and consider other things,” he said. 

In 2019, the National Funeral Directors Association reported that the median national cost for a funeral was between $5,150 and $9,135 depending on whether the person was cremated or buried. 

Those costs are borne by grieving loved ones who aren’t necessarily able to think in great detail about the many optional parts of a funeral, and for whom saying goodbye is a powerful part of the grief process. That’s one reason why the FTC regulates the funeral profession on a federal level under the Funeral Rule, a piece of legislation dating back to the 1970s designed to protect consumers that requires the death care industry to provide price lists. Slocum’s organization is currently lobbying the FTC to modernize the rule and require funeral homes to list prices on their websites, which they say will increase transparency and allow people to comparison shop. 

The COVID-19 funeral assistance is helpful for some families, said Slocum, but there are still more than 2.6 million American who die in an average year whose families won’t receive federal help for the high costs of a funeral.

Others who watch the death industry are doubtful that the money will have the intended impact for those who lost loved ones before the benefit was rolled out.  

“People who didn’t have money in 2020 opted for less expensive methods,”  said Tanya Marsh, a professor of law at Wake Forest University who studies the funeral and cemetery trades. With the FEMA funding, she said, “Okay, they got reimbursed for those less expensive methods, but that didn’t give them any increased choice.” 

The FEMA program would have made more sense to introduce at the beginning of such a widespread crisis, she said. Under a different administration, she thinks that might have happened.   

Putting a loved one to rest is an important part of the grieving process. “The expectation of being able to have those rituals, I think that’s what matters most,” said Nancy Berns, a Drake University professor of sociology who studies grief. With COVID-19’s interruptions, she said, people aren’t just grieving the loss of a loved one: They’re grieving the fact they couldn’t memorialize them as they expected.

“Some people are having memorial services now for people who died months ago,” Berns said, “trying to recapture some of those rituals even if they’re in a different form.” 

Lozano plans to follow her mother’s wishes for her estate and divide the money she just received from FEMA evenly between herself and her two brothers. It won’t bring her mother back, she said, but “it’s something.”

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