A Medicaid eligibility IT system operated by consulting giant Deloitte has erroneously denied healthcare benefits to people with severe disabilities in Michigan. The computer system errors either cut off coverage completely or misdirected vulnerable individuals into restricted plans, stranding patients who rely on Medicaid for essential care.
The systemic failures in Michigan come as state officials face aggressive new administrative mandates under federal law. President Donald Trump’s tax and domestic spending package establishes strict work verification requirements for Medicaid enrollees, threatening to overwhelm state bureaucracies and compound existing technology glitches across the country.
Among those impacted by the technology glitches is Marie Noon, a disabled Michigan resident living with adult-onset Still’s disease. Noon suddenly lost her Medicaid coverage last year after the automated system flagged her account incorrectly, leaving her temporarily unable to access necessary medical treatments.
Deloitte has built and managed Michigan’s Medicaid eligibility infrastructure since 2006 under contracts totaling roughly $768 million. The company holds a massive footprint in public sector tech, serving as the dominant contractor for state safety-net programs nationwide. Deloitte currently maintains eligibility system contracts in at least 25 states, managing digital access for approximately 53 million Medicaid beneficiaries.
Federal Work Rules Escalate Technology Strain
The documented failures within state portals now intersect with sweeping policy changes. Under the federal law, non-exempt adult Medicaid recipients must document at least 80 hours per month of work, job training, community service, or education. States must verify this employment status twice annually to maintain an individual’s enrollment.
To implement the federal directives, state agencies are directing hundreds of millions of tax dollars to private technology vendors. Contractors like Deloitte are tasked with rapidly altering eligibility software to track employment databases, process exemptions, and auto-verify monthly activity. Yet healthcare advocates warn that layering complex data checks onto already buggy platforms risks triggering widespread, erroneous disenrollments.
As states spend millions on private technology contractors to meet the new compliance standards, legal challenges are mounting over how these systems evaluate vulnerable populations. A coalition of 25 states recently filed suit against federal officials over the strict implementation of these rules, highlighting ongoing disputes surrounding medical frailty exemptions and eligibility verification.
Projections from the Congressional Budget Office indicate that the heightened paperwork burdens and automated reporting hurdles will cause an estimated 7.5 million people to lose Medicaid coverage by 2034, largely due to administrative delays and system processing errors rather than shifts in financial eligibility.