The Hidden Cost of Cutting America’s Safety Net: How Consulting Giants Profit From Poverty Programs

Contractors Cash In as Millions Face Benefit Losses

In a troubling intersection of corporate profit and social policy, state governments across America are funneling millions of taxpayer dollars to consulting giants like Deloitte, Accenture, and Optum to help implement President Trump’s One Big Beautiful Bill Act—legislation poised to strip essential health and food benefits from millions of vulnerable Americans. These familiar corporate names, typically associated with Fortune 500 companies, have carved out a lucrative niche managing the complex computer systems that determine whether low-income families qualify for Medicaid or food stamps through the Supplemental Nutrition Assistance Program. The irony is stark: while states scramble to update their eligibility systems to add red tape and restrictions, these contractors stand to earn substantial fees for work that will ultimately result in fewer people receiving the help they desperately need. Documents obtained through investigation reveal that in just five states, these system changes will cost at least $45.6 million combined, with the federal government—meaning everyday taxpayers—covering most of the bill. For the poorest Americans who depend on these programs, the stakes couldn’t be higher; these benefits often represent the difference between receiving necessary medical care and having enough food on the table, or going without both.

A Profitable Business Built on Government Dependency

The scale of this corporate involvement in public assistance programs is staggering and largely hidden from public view. Deloitte, a global consulting powerhouse that generated $70.5 billion in revenue in fiscal year 2025, has emerged as the dominant player in this specialized government services market. The company operates eligibility systems in multiple states under contracts worth hundreds of millions of dollars—including a five-year deal in Kentucky worth over $157 million and an ongoing relationship in Wisconsin dating back to 2012. Accenture holds Iowa’s Medicaid system contract valued at more than $60 million, while Optum, a subsidiary of the healthcare behemoth UnitedHealth Group, manages Vermont’s system under a contract worth $125.6 million as of last October. These companies weren’t shy about promoting their services at industry conferences, with Deloitte representatives handing out brochures touting their role in “building a new era in state health care” and offering “strategic outreach and responsive support” to help states navigate the new requirements. Meanwhile, other contractors like Gainwell and Conduent emblazoned their logos on hotel escalators and set up promotional booths, positioning themselves as the solution to help government agencies “work smarter by simplifying operations, cutting costs and driving better outcomes.” The messaging is slick and corporate, but the human cost remains largely unexamined in these glossy materials.

The Troubling Track Record of Eligibility Systems

What makes this massive investment particularly concerning is the documented history of errors in these contractor-operated systems—mistakes that have repeatedly cut off benefits to people who actually qualify for assistance. A comprehensive investigation by KFF Health News revealed a pattern of system failures that have left eligible families without the help they need and deserve. Now, as states rush to implement Trump’s sweeping changes to tax and domestic spending policy, these same problematic systems will be tasked with tracking even more complex requirements, including verifying employment status, monitoring job-related activities, and processing various exemptions. The added complexity creates exponentially more opportunities for errors that could wrongfully deny benefits to vulnerable families. Harvard health policy professor Adrianna McIntyre didn’t mince words about the financial windfall these contractors are receiving: “This is a pretty big payday.” Yet while consulting firms collect their fees for system modifications, the Congressional Budget Office projects devastating human consequences—7.5 million people will become uninsured by 2034 due to the law’s Medicaid policies alone, and roughly 2.4 million people, including families with children, will lose access to monthly cash assistance for food. The math reveals a troubling calculation: Wisconsin expects to save $532.6 million in annual Medicaid spending by removing an estimated 63,000 adults from coverage, while paying Deloitte nearly $6 million just for two Medicaid-related computer system changes, plus another $4.2 million for SNAP program modifications.

The Work Requirements Mandate: A Historic Shift in American Policy

The centerpiece of these system changes involves implementing something unprecedented in the 60-year history of Medicaid: mandatory work requirements for millions of enrollees. Since President Lyndon Johnson created the government insurance program in 1965, Congress had never required that Medicaid recipients hold jobs, volunteer, or attend school as a condition of receiving healthcare coverage. That foundational principle is being upended as the new law mandates that millions of Medicaid enrollees in 42 states and the District of Columbia prove they’re working or participating in similar activities for 80 hours monthly, unless they qualify for exemptions. The Congressional Budget Office projected that 18.5 million adults would be subject to these new rules based on an early version of the bill—representing nearly half of all enrolled adults. In Vermont alone, almost 55,000 Medicaid recipients, about a third of the state’s enrollees, will face work requirements. Deputy Commissioner Adaline Strumolo of Vermont’s Department of Vermont Health Access described the scramble to comply: “This is a big, big lift. The law forced the state to essentially drop everything else we were doing.” Advocacy groups for Medicaid recipients point out a cruel irony: nearly two-thirds of adult Medicaid enrollees nationally are already working, according to KFF research, yet the new requirements will still cause massive coverage losses simply because of the added bureaucratic burden of proving compliance in systems already prone to error.

Beyond Work Requirements: Additional Barriers to Benefits

Work requirements represent just one of multiple hurdles the Trump tax law erects between low-income Americans and essential assistance. Starting in October, the legislation prohibits several immigrant populations from accessing Medicaid and Affordable Care Act coverage, including people who have been granted asylum, refugees, and certain survivors of domestic violence or human trafficking—some of society’s most vulnerable individuals. Beginning December 31, states must verify eligibility twice yearly for millions of adults, effectively doubling the administrative workload for state agencies and creating two annual opportunities for system errors to wrongfully terminate coverage. The law also tightens SNAP restrictions by requiring more adult recipients to work and by removing work exemptions for veterans, homeless people, and former foster youth—groups facing significant employment challenges through no fault of their own. When Trump signed the bill in July, Kentucky health officials immediately labeled necessary system changes a “high priority” and approved them on an “emergency” basis, with Deloitte charging $1.6 million for initial modifications to the state’s integrated eligibility system. These rushed changes to the nation’s largest food aid program took effect almost immediately. In Iowa, Accenture’s cost estimate for implementing work requirements ballooned from $7 million in March to roughly $20.3 million by July, as the company determined the federal law necessitated additional system changes beyond what Iowa’s own proposed work requirements would have required.

Discounts, Doubts, and the Human Impact

The Trump administration has sought to portray these contractor costs as reasonable, announcing in January that companies including Deloitte, Accenture, and Optum had promised discounts and reduced rates through 2028 to help states incorporate system changes. Daniel Brillman, CMS’s top Medicaid official, enthusiastically declared that “the companies were extremely excited to do this” and that “everyone’s really focused on getting to work.” However, questions about what these discounts actually mean in practice reveal a murkier picture. Wisconsin officials declined to confirm whether Deloitte discounted its rates, Kentucky didn’t answer the question, and Vermont’s experience suggests the “discounts” may be more marketing than substance. Strumolo explained that Optum offered discounts only for a specific work requirements module that proved unworkable for Vermont because implementing it would mean “moving to a new system when we don’t have to,” adding that beyond this limited offer, Optum hasn’t provided discounts “not explicitly.” Bobby Peterson, executive director of the public interest law firm ABC for Health, captured the frustration many feel about Wisconsin’s priorities: “They’re very willing to throw $6 million to their contractors to create the bells and whistles, but have invested very little to help people navigate the Medicaid eligibility process, which soon will become more difficult. That’s where I feel a sense of frustration.” In Cedar Rapids, Iowa, Joe Lock, CEO of Eastern Iowa Health Center where most patients rely on Medicaid and live at or below the poverty level, questioned the fundamental logic: “There is no benefit to this population,” he said, referring to the policy of spending tens of millions to remove 32,000 Iowans from Medicaid—potentially saving $183 million from the state’s $8.9 billion annual Medicaid budget. As states continue implementing these changes, with Vermont’s Strumolo warning that “there’s a lot more that could come,” the gap between corporate profits and human welfare has never been more apparent.