The Big Picture: Who Benefits From Medicaid Cuts?
States across the US are paying private contractors tens of millions of dollars to comply with a sweeping new federal law — one designed to reduce Medicaid and food assistance rolls. Firms like Deloitte, Accenture, and Optum stand to gain significantly. Meanwhile, millions of low-income Americans stand to lose critical health and nutrition benefits.
Furthermore, the federal government funds most of these contract costs — meaning taxpayers pay both for the system upgrades and the resulting coverage losses.
How Eligibility Systems Work — And Who Runs Them
The Role of Private Contractors
State governments rely heavily on private companies to build and manage the computer systems that determine Medicaid and SNAP eligibility. These platforms decide who qualifies for health coverage and monthly food assistance.
However, these systems carry a troubled track record. Investigations by KFF Health News have revealed a persistent history of errors. In multiple states, faulty systems have wrongly cut benefits for people who clearly qualify — including pregnant women in Florida.
Despite this record, states continue to expand their reliance on these same contractors. Now, they are asking them to implement a new wave of restrictive policy changes.
The One Big Beautiful Bill Act Explained
What the Law Does
The One Big Beautiful Bill Act represents President Donald Trump’s signature tax-and-spending legislation. The law introduces major restrictions to Medicaid and the Supplemental Nutrition Assistance Program (SNAP), commonly known as food stamps.
Key provisions include:
- Work requirements — Most states must now link Medicaid coverage to employment for certain adult populations.
- Tighter enrollment rules — The law adds additional barriers that make it harder for low-income people to stay enrolled.
- SNAP cuts — Restrictions on food assistance took effect in 2025, with broader Medicaid provisions rolling out later in 2026.
According to the nonpartisan Congressional Budget Office (CBO), the law’s Medicaid policies will push 7.5 million people into uninsured status by 2034. Additionally, approximately 2.4 million people — including families with children — will lose their monthly food assistance.
State-by-State: The Real Cost of Compliance
Wisconsin
Deloitte prepared documents for the Wisconsin Department of Health Services estimating two Medicaid computer system changes — tied to new work requirements — will cost nearly $6 million. Two additional SNAP-related changes will add $4.2 million to that total.
Iowa
In Iowa, Accenture — which operates the state’s eligibility system — estimates that complying with the new Medicaid requirements will cost at least $20 million. This figure represents the single largest state-level estimate reviewed by KFF Health News.
Vermont
Optum manages the platform Vermont residents use for both Medicaid and marketplace plans under the Affordable Care Act. The company estimates costs of roughly $1.8 million to evaluate and incorporate the new federal health coverage restrictions.
Kentucky and Illinois
Kentucky has partnered with Deloitte since 2012. Initial changes required by the new law have already cost the state $1.6 million. In Illinois, Deloitte estimates system modifications will reach at least $12 million.
In total, across just five states, company estimates reviewed by KFF Health News show compliance costs of at least $45.6 million combined.
Who Foots the Bill?
Federal Dollars Drive the Spending
While individual states negotiate and sign contracts with these consulting firms, the federal government covers the majority of the costs. States manage the updates; Washington pays for them.
This arrangement creates a notable paradox: the federal government spends millions on system upgrades specifically designed to remove people from federally funded programs. Contractors profit from both sides — building systems that first enroll, and now systems that restrict.
Millions at Risk: The Human Cost
Beyond the Dollar Figures
The financial costs of compliance are significant. Yet the human cost runs deeper. The CBO projects that 7.5 million Americans will lose health insurance coverage by 2034 as a direct result of the law’s Medicaid policies. Millions more will face food insecurity as SNAP restrictions tighten.
Low-income adults, families with children, and people navigating complex eligibility rules face the steepest barriers. As contractors update algorithms and eligibility logic, each system change carries real consequences for real people.
Ultimately, the data makes clear that private firms like Deloitte, Accenture, and Optum will earn substantial contracts through this process. The question of who bears the true cost, however, remains straightforward — it is the Americans losing coverage.
