Medicaid doesn't allow enough money for final expenses.

My MIL, who is currently a private pay resident at a NH, is about to run out of money and we will be applying for Medicaid in a few months. We were told that we should pre-pay her final expenses before her money runs out. I am a little confused about this. In our state, they say you are allowed $5000 for funeral costs plus (I think) opening and closing, casket and vault. The other thing is we will have to transport her body back to her home state. If I understand them right, they may let us take a maximum of $10,000 out of her acct. She does have some small life insurance policies, one of which they will make us cash out and give them. the other two do not amount to much. Any advice? We do not have money ourselves, and this just does not seem like enough money for a decent funeral and burial.