Deloitte-Run Systems Denied Medicaid to Disabled People, New Laws Could Make It Worse

Automated eligibility systems operated by Deloitte — a global consulting firm that generated $70.5 billion in revenue last year — have been systematically denying or restricting Medicaid coverage to disabled individuals across multiple states, according to an investigation by KFF Health News published in partnership with NPR. Now, new federal work requirements set to take effect could compound these failures, leaving even more vulnerable Americans without access to healthcare.

The Human Cost of System Errors

Marie Noon, 48, of Brighton, Michigan, was diagnosed with adult-onset Still’s disease, a rare inflammatory arthritis that causes debilitating pain and fevers. After losing private insurance, she applied for Medicaid in August 2025 — only to be denied. The reason? An IT error. Michigan’s eligibility system, operated by Deloitte under contracts worth roughly $768 million since 2006, failed to register her as disabled and incorrectly determined she earned too much to qualify.

“I honestly thought I was going to die,” Noon told KFF Health News. She spent months paying hundreds of dollars out of pocket for medications, scrounging for discount coupons while appealing the denial. “I can’t tell you how many times I just wanted to give up.”

It took intervention from Anastassia Kolosova, a supervising attorney with Disability Rights Michigan, and months of appeals before the state reversed its decision in January 2026. “There’s something wrong with the system if they’re relying on individual caseworkers to catch this,” Kolosova said. “The system needs to work.”

A Pattern Across States

Noon’s case is far from isolated. A KFF Health News investigation found that Deloitte — which has contracts with at least 25 states worth at least $6 billion — has been at the center of eligibility system failures nationwide.

In Tennessee, a federal judge sided with Medicaid beneficiaries in a 2024 class-action lawsuit, ruling that the state’s Deloitte-built system violated federal law and the U.S. Constitution. The system incorrectly merged family records, sent paperwork to wrong addresses, and caused coverage losses. Deloitte’s Tennessee contract is worth $1.12 billion over a decade.

In Texas, Lilly Livingston, 22, who has Down syndrome, was abruptly cut off from Medicaid in 2023 and wrongly enrolled in Healthy Texas Women — a limited program covering only cancer screenings and family planning. Her mother described the fight to fix the error as “a nightmare.”

Colorado’s system has been plagued by errors for years. A 2020 audit found 67% of system notices contained errors, including one demanding a response by a date eight years in the past. A 2023 audit found problems in 90% of sampled enrollee notices.

Other states have experienced similar failures. Kentucky’s 2016 rollout erroneously sent 25,000 automated letters telling people they would lose benefits, creating a backlog of 50,000 cases. A botched Rhode Island rollout in 2016 delayed tens of thousands of Social Security payments. In Pennsylvania, system errors in 2023 affected 9,269 children’s health insurance coverage. And Florida’s Deloitte-run system erroneously cut off Medicaid benefits for new mothers who were eligible.

Deloitte’s Response

Deloitte spokesperson Karen Walsh said the company found “no system anomalies causing routine denials of Medicaid for people with disabilities.” She added that “all of the eligibility systems we support are owned by the states and built to their unique specifications.”

Kenneth Smith, a Deloitte executive who leads its national human services division, told KFF Health News: “They’re not Deloitte systems.”

But critics point to the pattern of failures across multiple states as evidence of systemic problems. The National Health Law Program filed a complaint with the Federal Trade Commission in January 2024, alleging “ongoing and nationwide” errors and “unfair and deceptive trade practices” by Deloitte, as reported by The Texas Tribune.

New Laws Threaten to Worsen the Crisis

The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, requires most states to condition Medicaid eligibility on meeting work requirements — 80 hours per month of work or qualifying activities — for expansion adults. The Congressional Budget Office estimates that 7.5 million people will become uninsured by 2034 due to the law’s Medicaid provisions, and 2.4 million will lose SNAP benefits.

States are now rushing to update their eligibility systems to track employment, verify exemptions, and process more frequent checks — paying Deloitte, Accenture, and Optum millions of dollars to make the changes. In five states alone, modifications will cost at least $45.6 million, according to KFF Health News.

Critics argue that systems that already wrongly deny coverage to disabled individuals will become even more overburdened. “When these administrative systems get overloaded, everyone gets impacted,” said Pamela Herd, a University of Michigan professor. “The systems are going to be really, really strained.”

Oversight and Accountability

In October 2025, Senators Ron Wyden, Elizabeth Warren, Raphael Warnock, and Bernie Sanders launched an inquiry into Deloitte and other contractors, as CBS News reported. Wyden described the companies as “health care middlemen that are in the business of red tape, and they profit when Americans don’t get health care.”

“Without stronger oversight and real accountability,” Wyden said, “these contractors are just going to get a jumbo windfall for creating systems that actually harm Americans trying to get health care.”

What’s Next

With a January 1, 2027 deadline for states to implement work requirements, the pressure is mounting. The same systems that have a documented history of erroneously denying benefits to disabled individuals will now be tasked with verifying employment status, processing exemptions, and conducting more frequent eligibility checks.

For people like Marie Noon, who finally secured coverage after months of fighting, the future remains uncertain. “I literally cried,” she said when she was finally approved. “It was a really big deal.”

But as states race to comply with the new law, advocates warn that many more disabled Americans may face similar battles — and that the systems designed to help them may fail them again.