By Samantha Liss and Rachana Pradhan, KFF Health News
States are paying contractors such as Deloitte, Accenture, and Optum millions of dollars to help them comply with the One Big Beautiful Bill Act — a law that will strip safety-net health and food benefits from millions.
State governments rely on such companies to design and operate computer systems that assess whether low-income people qualify for Medicaid or food aid through the Supplemental Nutrition Assistance Program, commonly referred to as food stamps. Those state systems have a history of errors that can cut off benefits to eligible people, a KFF Health News investigation showed.
These benefits, provided to the poorest Americans, can mean the difference between someone obtaining medical care and having enough to eat — or going without.
States are now racing to update their eligibility systems to adhere to President Donald Trump’s sweeping tax and domestic spending law. The changes will add red tape and restrictions. They are coming at a steep price — both in the cost to taxpayers and coverage losses — according to state documents obtained by KFF Health News and interviews.
The documents show government agencies will spend millions to save considerably more by removing people from health benefits. While states sign eligibility system contracts with companies and work with them to manage updates, the federal government foots most of the bill.
The law’s Medicaid policies will cause 7.5 million people to become uninsured by 2034, according to the nonpartisan Congressional Budget Office. Roughly 2.4 million people will lose access to monthly cash assistance for food, including those with children.
In five states alone, company estimates developed for state officials and reviewed by KFF Health News show that changes will cost at least $45.6 million combined.
“This is a pretty big payday,” said Adrianna McIntyre, an assistant professor of health policy and politics at Harvard’s T.H. Chan School of Public Health.
The law, which grants tax breaks to the nation’s wealthiest people, requires most states to tie Medicaid coverage for some adults to having a job, and imposes other restrictions that will make it harder for people with low incomes to stay enrolled. SNAP restrictions began to take effect in 2025. Major Medicaid provisions begin later this year.
Documents prepared by consulting company Deloitte estimate that a pair of computer system changes for Medicaid work requirements in Wisconsin will cost nearly $6 million. Two other changes related to the state’s SNAP program will cost an additional $4.2 million, according to the documents, which Deloitte drafted for the Wisconsin Department of Health Services.
In Iowa, changes to its Medicaid system are expected to cost at least $20 million, according to an estimate prepared by Accenture, a consulting company that operates the state’s eligibility system.
Optum — which operates the platform Vermont residents use for Medicaid and marketplace health plans under the Affordable Care Act — estimated that it could cost roughly $1.8 million to evaluate and incorporate new health coverage restrictions.
Initial changes in Kentucky, which has had a contract with Deloitte since 2012, have cost the state $1.6 million. And in Illinois, Deloitte estimated modifications will cost at least $12 million.
A Historic Mandate
For six decades after President Lyndon Johnson created the government insurance program in 1965, Congress had never mandated that Medicaid enrollees have a job, volunteer, or go to school.
That will change next year. The tax and spending law enacted by Trump and congressional Republicans requires millions of Medicaid enrollees in 42 states and the District of Columbia to prove they’re working or participating in a similar activity for 80 hours a month, unless they qualify for an exemption. The CBO projected, based on an early version of the bill, that 18.5 million adults would be subject to the new rules — nearly half of those enrolled.
Vermont Medicaid officials expect it will cost $5 million in fiscal 2027 to implement changes in response to the federal law, said Adaline Strumolo, deputy commissioner of the Department of Vermont Health Access. About $1.8 million is for Optum to make eligibility system adjustments. Optum is a subsidiary of UnitedHealth Group.
The One Big Beautiful Bill Act will subject nearly 55,000 Vermont Medicaid recipients to work requirements — about a third of the state’s enrollees.
The law forced the state “to essentially drop everything else we were doing,” Strumolo said in an interview. “This is a big, big lift.”
Optum’s contract with the state was worth $125.6 million as of October.
Nearly two-thirds of adult Medicaid enrollees nationally are already working, according to KFF. Advocacy groups for Medicaid recipients say work requirements will nonetheless cause significant coverage losses. Enrollees will face added red tape to prove they’re complying. And eligibility systems already prone to error will have to account for employment, job-related activities, and any exemptions.
An estimated 5.3 million enrollees will become uninsured by 2034 due to work requirements, the CBO reported.
In Wisconsin, state officials estimate roughly 63,000 adults could lose coverage after work requirements take effect. Not covering those people would save $532.6 million in Medicaid spending for one year.
Bobby Peterson, executive director of the public interest law firm ABC for Health, said Wisconsin has invested “very little” to help people navigate the Medicaid eligibility process, which soon will become more difficult.
“But they’re very willing to throw $6 million to their contractors to create the bells and whistles,” Peterson said. “That’s where I feel a sense of frustration.”
New Hurdles for Vets and Homeless People
Medicaid work requirements are only one change required by Trump’s tax law that will make it harder to obtain safety-net benefits.
Starting in October, the law prohibits several immigrant populations from accessing Medicaid and ACA coverage, including people who have been granted asylum, refugees, and certain survivors of domestic violence or human trafficking. Beginning Dec. 31, states must verify eligibility twice a year for millions of adults — doubling state officials’ workload. And the law restricts SNAP benefits by requiring more adult recipients to work and by removing work exemptions for veterans, homeless people, and former foster youth.
Days after Trump signed the bill in July, Kentucky health officials raced to make changes to the state’s integrated eligibility system, which verifies eligibility for Medicaid, SNAP, and other programs. Deloitte operates the system under a five-year contract worth more than $157 million.
Deloitte spokesperson Karen Walsh said the company is working with states to implement new requirements but declined to answer questions about cost estimates in several states. “We are delivering the value and investments we committed to,” Walsh said.
In most states, government agencies rely on contractors to build and run the systems that determine eligibility for Medicaid. But the federal government — that is, taxpayers — covers 90% of state costs to develop and implement state Medicaid eligibility systems and pays 75% of ongoing maintenance and operations expenses, according to federal regulations.
KFF Health News found that Deloitte, a global consultancy that generated $70.5 billion in revenue in fiscal 2025, dominates this slice of government business.
A $20.3 Million Bill in Iowa
Before Trump signed the One Big Beautiful Bill Act, Iowa lawmakers wanted to impose their own version of work requirements. They would have applied to 183,000 people before any exemptions. The new law would necessitate a change to Iowa’s Medicaid eligibility system, according to documents prepared by Accenture, which operates Iowa’s system through a contract worth more than $60 million.
Adding the ability to verify work status would cost up to $7 million, an Accenture estimate from March 2025 showed. By July, the cost to implement the One Big Beautiful Bill Act’s work requirements and other Medicaid provisions skyrocketed to roughly $20.3 million. Making employment a condition of Medicaid benefits could cause an estimated 32,000 Iowans to lose coverage, according to a 2025 state document.
Cutting 32,000 people from coverage could save $183 million in one year, a fraction of the $8.9 billion Iowa and the federal government spend on Medicaid in a given year.
In Cedar Rapids, most of Eastern Iowa Health Center’s patients rely on Medicaid, CEO Joe Lock said. He questioned the government’s logic of spending tens of millions of dollars on a policy to remove Iowans from Medicaid.
Most of the health center’s patients live at or below the federal poverty level — currently $33,000 for a family of four.
“There is no benefit to this population,” Lock said.
In Illinois, the state estimates that as many as 360,000 residents could lose Medicaid, largely due to the work requirements, said Melissa Kula, a spokesperson for the Illinois Department of Healthcare and Family Services.
The Trump administration has acknowledged that the work is coming at a cost. In January, top officials for the Centers for Medicare & Medicaid Services said government contractors, including Deloitte, Accenture, and Optum, have promised to offer discounts and reduced rates through 2028 to help states incorporate system changes.
“The companies were extremely excited to do this,” said Daniel Brillman, the top CMS Medicaid official. “Everyone’s really focused on getting to work.”
It’s unclear what discounts, if any, Deloitte and Accenture have offered to individual states. Accenture did not respond to repeated requests for comment.
In a statement, UnitedHealth Group spokesperson Tyler Mason said Optum supports state implementation of new federal requirements “with a range of options to meet their unique cost and policy needs.”
Strumolo said Optum’s initial changes in Vermont cover items that take effect this year and in 2027 — Medicaid work requirements, checking eligibility every six months, and prohibiting certain immigrants from qualifying for health programs.
“There’s a lot more that could come,” she said.
This article is republished from KFF Health News, a national newsroom that produces in-depth journalism about health issues. About KFF. About KFF Health News.