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 firm 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 firm 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.
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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.
Wisconsin’s eligibility system for Medicaid and SNAP — known as CARES — was implemented statewide in 1994, and initially was a transfer system from Florida, according to a 2016 state document.
Deloitte submitted its cost estimates for Medicaid and SNAP changes to the state in September and December. Elizabeth Goodsitt, a spokesperson for the Wisconsin Department of Health Services, declined to answer questions about whether additional changes will be needed, how much it will cost to make all eligibility system changes to comply with the new federal law, and whether the state negotiated prices with Deloitte.
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